Steven Gluckstern, chairman of San Francisco-based Mortgage Resolution Partners, believes he may have the answer for the country’s housing problems. His proposal is that the cities would take over the mortgages for many of these underwater homeowners. He claims that the homeowners would still be able to stay in their homes. The banks or trusts would be paid fair market value for the mortgages. (Who determines fair market value? Good question. I don’t know). The idea comes out of those thinking how they can fix the ongoing housing problems in San Bernardino county in southern California.
It certainly seems like a radical proposal and I don’t know if this will really fix the housing market or not, but can our cities really afford to be in the business of holding mortgages for homeowners? Where would the funding come from? What do you think?