In 2008, The Mortgage Holiday was presented to the public by successful businessperson Mark Hemstreet. Foreclosures continue to burden the economy due to the sheer numbers on the market. On May 16<sup>th</sup>, the United States Department of Commerce released data indicating that the construction of homes and apartments dropped to 10.6%. The information was also highlighted in the May 17th edition of the Wall Street Journal.
The housing crisis started in 2007 and through the years, foreclosures have escalated to current levels. There are more foreclosures available than there are buyers. This proposal is once again being circulated among political leaders as a possible solution.
Mark Hemstreet has handed every Congressional representative a copy of his Mortgage Holiday. Joe Madison, a national talk show host on Sirius 128's "The Power," handed President Obama a copy during an exclusive interview he did last October. Foreclosures continue to burden the economy because leaders are attempting traditional solutions for a non-traditional problem. The current housing crisis is the worst most have seen in this lifetime.
What the recovery could look like
Hemstreet thinks the proposal is a solution to the country's current economic problems. He suggests that at this pace, the economy will take 3 to 5 years to recover. Based on assumptions from the proposal, there could be immediate economic improvement within 2 months and by 12 months, the economy could be on the road to full recovery.
As indicated from the Commerce report, the economy is currently at a standstill. Political leaders have attempted various strategies to prop up the economy, but their results have been mixed. Hemstreet's biggest plea is for people to read the program, and contact their elected officials for support. As an alternative, if political leadership does not adopt the proposal, his next move is to recruit known celebrities. Their task would be to communicate with the public.
Bullet points of the proposal
The Mortgage Holiday is a 9-point program:
- The program is voluntary.
- The program provides a timeout from making mortgage payments for up to 12 months (there is also an option for renters). It is from this pool that consumers could access accumulated funds to "jumpstart" or fuel the economy.
- Additional government funds ARE NOT NEEDED. This is because there is funding available from the TARP program and earlier Bailout funds.
- Instant loan modifications are at 4%.
The economy is showing slow signs of recovery. Housing starts are a critical metric, but something must be done with the foreclosure inventory. If something like The Mortgage Holiday was seriously considered, it would be a safe assumption that future foreclosures would be minimized.