I have an idea that will make someone a fortune: refinance responsible homeowners who are underwater and whose mortgages are not Fannie/Freddie backed.
I'd love to refinance, but because we are not F/F backed we don't qualify--we're underwater. There is a program for homeowners like us, but the lender has to voluntarily participate. I think we all know that mortgage lenders don't voluntarily do anything.
What I'm proposing is that someone with lots of capital (Warren Buffet, do you read my blog?) start refinancing homeowners who have never missed or been late on payments, and whose homes can't appraise high enough to refinance.
Why would this work? First, you know these people are reliable. They're making their payments, on time, despite higher interest rates and even bouts of unemployment. These homeowners like their homes and their neighborhoods and want to stay put. Second, in refinancing only the amount remaning on the the loan, the homeowners can even more easily make their payments and have a little extra to spread throughout the economy (win/win). Finally, the new mortgage company would MAKE MONEY. It would be collecting interest that is currently going to another mortgage company.
Overly simplified, maybe. But logical, no?