Memo to President Obama

I'd first like to take the opportunity to congratulate you and your family on your historic journey to the Presidency of the United States. It is arguably the toughest job in the world. The expectations placed upon your administrations shoulders are high, but I'm confident that you will put a team in place that will address the myriad of issues facing our country today, the most significant being the economy.

From all accounts, the primary catalyst for our current economic woes is the collapse of the housing market that is attributable to a wave a foreclosures, which in turn has had a major impact on property values. You and Secretary Geittner have taken the initiative to address the problem by offering a $700B bailout package to the banks under the Troubled Assets Relief Program (TARP) as a means to unclog credit lines, and to slow the rate of foreclosures by offering to restructure and refinance the existing balances of mortgages under the "Making Home Affordable Plan" in situations where homeowners owe more than what the property is actually worth. I completely understand that there is no quick fix for such problems, however the results of those plans so far do not appear to be promising. In spite of all of your efforts and promises since being elected, the banks continue to be reluctant to extend credit and modify/refinance mortgages, both of which are critical to stimulate the economy and create job growth. The requirements levied upon average Americans by the banks to obtain a line of credit or to refinance their homes right now is unattainable and quite frankly unrealistic.

In order to properly address the housing crisis in this country, your administration must look at it from the perspective of an average American and take a common sense approach to resolving the problem. If a family is struggling to pay their mortgage and utility bills each month, why would they purchase a new car or other retail goods, as you have encouraged us to do in recent months? How do small businessmen in skilled trade or the tourism industry retain their employee and stay afloat if a family is unable to make repairs and improvements to their home, or afford to go on vacation? My point Mr. President is that the average American right now is more concerned with how to save their money to keep a roof over his or her family's head, rather than how to spend money on non-essential expenditures. Unfortunately, neither TARP nor the Making Home Affordable Plan addresses that everyday concern.

After much thought about the matter, I've developed 5-point proposal for you and Secretary Geittner to consider that I believe will address the mortgage crisis, which in turn will satisfy the concerns of banks, homeowners, and small businesses.

1) Allocate up to $1M to each U.S. homeowner that will be put towards the mortgage balance of their primary home. The funds for the balance will be remitted directly to the bank or financial institution in which the property is mortgaged.

According to the most recent U.S. Census taken in 2006, there are approximately 75 million homeowners in the U.S. By appropriating up to $1M towards the balances of each homeowners mortgage, the federal government could save the nearly $700B in unregulated tax payer funds that were allocated to banks and other financial institutions, which would significantly reduce the home foreclosure and bankruptcy rate in the U.S. Considering that a majority of the mortgage balances in this country are under $1M, all of the mortgage lenders will be repaid in full, which will then allow the banks to unload depreciating assets from their holdings. In addition, the money that homeowners were previously using to make their mortgage payments each month could now be put towards other endeavors that stimulate the economy and job growth such as:

Home repairs and improvements, which in the long run increase property value.

• Purchasing new vehicles, that get people to and from work, spur travel, and more importantly keeps the U.S. auto industry afloat.

• Consumer spending, which keep retail stores operational that are vital to long-term economic development and expansion in urban and rural areas of the U.S.

• Paying off consumer debt to help unclog credit lines and free up lending.

2) Each U.S. homeowner that accepts the "buyout" will be required to sign an agreement of shared ownership, in which the property remains deeded to the homeowner, but is held by the Department of Treasury.

This measure will allow banks to unload any depreciating real estate assets from their holdings and portfolio's and allow the Department of Treasury to sell it in case of default.

3) Each U.S. homeowner that accepts the "buyout" will also be required to pay a monthly real estate or property tax, based on the current market value of the home in its respective city or county, from an escrow account which will be remitted to the federal, state, and city/county treasuries. If the homeowner defaults on the monthly tax payment, the home will be foreclosed and placed on the market for sale to the public by the Department of Treasury.

This measure will ensure that over the long haul that the federal, state, and local Treasuries coffers are replenished with funds, while at the same time provide a plan to unload properties of homeowners that are delinquent in tax payments.

4) Upon acceptance of the buyout, the homeowner will not be allowed to take out any equity that has accrued in the property for ten years. If after the ten year period, the homeowner takes equity out of the property, then he/she does so under the terms and conditions of the financing institution, and will still be required to pay the monthly property tax.

This measure is a deterrence to protect the homeowner from financially overextending themselves to avoid the potential future tax default.

5) By accepting the buyout, the U.S. homeowner agrees not to sell the property for ten years from the bail out or pay off date. In the event, that the property is sold prior to the ten year commitment, the homeowner forfeits any and all proceeds from the sale to the Department of Treasury. After the ten year period, the property can only be sold for no more than $15K above the current market value, or no more than $15K above the current market value plus any balance owed on an equity line of credit that has been taken. If after the ten year period, the property is sold for more than $15K above the current market value, the Department of Treasury will receive the difference at the closing of the sale of the property or at the end of the tax year.

This measure not only encourages sustained home ownership by the homeowner, but also prevents the potential exploitation of the proposed bail out plan by real estate speculators.

I'm sure that our nation's problems are a bit more complicated that the solutions that I've laid out. However, the aforementioned 5-point plan is just a framework that is subject to modification to address the current conditions in the economy and housing market. I appreciate your time and consideration of this proposal and wish you and your administration nothing but the best in resolving the housing crisis. Thanks and I look forward to your response.

Signed,

A Concerned Average American