The monetary difference between a family’s ability to make ongoing home payments versus ending up in foreclosure is generally not that large a sum.

The Problem
The lengths people go to in an effort to keep from losing their homes very often digs such a deep hole for them, bankruptcy is just the beginning of their woes. Ruined credit and the additional stresses placed on relationships will further undermine this cross section of the population to the detriment of all.

The Opportunity
If private citizens invested in one another by subsidizing the difference between a manageable mortgage payment and the inflated one, we could stabilize the American housing market.

The Insight
People interested in investment opportunities rarely have an emotional stake in what their dollars will ultimate go towards once they have been committed to the market. Given the chance (and a fair ROI), many average Americans would prefer their contributions go towards the betterment of their compatriots’ quality of life.

The Execution
Banks would issue some form of provisional bridge loan for the difference between the pre-ARM maturity amount and the adjusted rate which would be purchased by individuals looking to invest in real estate without prohibitively large start-up costs. A profit sharing arrangement for the ultimate sale of the home that would be sequentially paid down with an option of a buy out plan at a fair interest rate allows both parties to gain.

The Selling Point
This fundamental variation on the “Buy American” sentiment provides participants the knowledge that their aid keeps a family’s life from crumbling over a few hundred dollars a month. From less altruistic perspective, pulling together to help your neighbors potentially buoys your home’s value as well.

The Incidental Benefits
Banks make for poor property managers and only undermine their own positions as homes sit empty, degrading all the while. Meanwhile the affordable housing market will be affected by a trickle down as displaced families begin to compete for lower rents. Opportunistic landlords will force the poorest of our nation into even more tight quarters by pricing them out in favor of those scrambling for a place to move. This approach would mitigate this process immensely.