Letter to the Editor---NYT November 26, 2008

U.S. Unveils New Programs to Ease Credit read the headline in the 
November 25 Edmund L. Andrews Times Article. Massive programs are not 
needed.  The Financial Market Plan is simple.  First, each homeowner 
is allotted up to $500,000.00 of mortgage relief on their principal 
residence. That amount equates with the current married taxpayer 
capital gain exclusion on the sale of a principal residence. Second, 
no money actually changes hands; it is all a paper transaction. The 
lending institutions still get the bailout monies they are currently 
receiving, but that money is used by them to cover the three to six 
month income gap created when the individuals for whom the relief is 
provided no longer are making mortgage payments or are making payments 
on a now lesser mortgage principal balance. Third, what will those 
homeowners do with their newfound wealth? They will do what all good 
American consumers do, spend it either by selling their home that now 
has a reduced or no mortgage at all and with the acquisition of a new 
home, obtain a new mortgage or just good old fashioned spending the 
money in retail. A simple plan that will undoubtedly create the flow 
of cash necessary for recovery in a short period of time. We are 
already giving the lending institutions the money to cover their 
investment in what are the 2008 equivalent of "junk bonds".  While we 
are spending the money, how about we fix the economy?

John M. Hanamirian