With each day's headlines peppered with stories and warnings about the worsening housing and debt crisis, I got to thinking about a solution. Why? Because it's none of my business, that's why. And because it's interesting.
So, as I understand it, a lot of people assumed mortgages with flexible (rather than fixed) interest rates. And when the interest rates jumped, the mortgage holders couldn't make their payments, and the lenders foreclosed. Now it seems to me that foreclosure not only makes the borrower homeless, but pretty much assures the lender that he won't see a penny of return on the loan. And forget reselling the house to a new lender; nobody's buying. So, why not come up with an interest rate that the borrower CAN pay, let him/her keep the house, and continue providing a revenue source for the lender? Or am I missing something?
Make double-digit interest on ANY loan
or credit line illegal.
Yep. That's right. Cap all interest rates on loans of any kind at 9.9%.
Face it, most of us have credit cards whose interest rates are just slightly higher than those charged by the Mafia. And the parasitic credit card companies have already successfully lobbied to make defaulting on their loans through bankruptcy nearly impossible. So, let's make what we owe them payable by capping the interest they can charge us.
I'm gonna look into this further...I can't possibly be the first to think of it.
In the meantime, feel free to share your ideas, or just your credit nightmare stories, here.