The Credit Crisis - The Real Solution

So years ago some huge infusions of capital coming from Venezuela triggered a market-hungry speculative race that ended up hurting most homeowners and created a worldwide economic chaos that does not seem to end. Of course no one wants to look back because we are very worried looking how investments and home ownership crumble in our eyes.

Let's point fingers. BANKS. What happened to your lending policies and procedures? What happen to credit qualifications and information verification? Since when does a bank lend money based on speculative market prices vis a vis realistic values? Why thousands of people got loans way beyond their monthly payment means? Yes, let's say it, it is YOUR FAULT for not following your own rules. And now you want the government to give you money so you will not go down?

By the way, this is a quick update, I'm extremely upset at the following news:

AP study finds $1.6B went to bailed-out bank execs

http://news.yahoo.com/s/ap/20081221/ap_on_bi_ge/executive_bailouts

While Americans are losing their homes, their retirement funds, these CROOKS are taking our money and sustaining their luxury lifestyles. I'd say let's make them responsible for what's going on and enforce SOX, but with a twist. Forfeit all their assets and set an example on how hot to steal taxpayers' money.


I propose an alternative solution:
Let's have the government buy loans at a discount, deep discount, and following these parameters: the more time a homeowner has hold his property, the higher the priority in getting his/her house saved by the program, then individuals who purchased homes recently and live in their homes. Last would be those who purchased properties for investment, although they should take the loss because as in any investment, they took the risk.
This way, the banks will get liquidity, and people would have peace of mind that they will not be railed by greedy bankers who want to have it all.
After all, banks haven't been fined or penalized for their absolutely outrageous lending practices.

Giving money to banks who have been clearly irresponsible on handling their own funds doesn't make sense. They would become liquid AND keep the mortgages. Should they be entitled to the profits of their ill credit practices?

By the way, there is no such thing as "government" money. Last time I checked we lived in a democracy, and the governments' money is really taxpayer's money, our own money.