Advertisement

Report: Writing Down Underwater Mortgages Could Create 1 Million Jobs

A report from the The New Bottom Line — a coalition of community, faith-based and labor groups — finds that “if banks wrote down all underwater mortgages to market value and refinanced the homeowners into 30-year, fixed-rate loans at current market interest rates, that would pump $71 billion into the national economy.” “That would amount to $6 billion every month that is currently going towards mortgage payments that could instead go towards buying groceries, school supplies, and other household necessities,” the report notes. “As consumer demand picked up, businesses would start hiring again, creating new jobs. Putting $71 billion into American consumers’ pockets would create 1.05 million jobs.” Banks have been extremely opposed to writing down principal for troubled borrowers.

Advertisement