=93I have an idea to help improve the current mortgage market crisis.
I
believe government should allow a onetime distribution from 401k,
traditional IRA, or Roth IRA without tax or penalty as long as the
distribution is used to pay down a first mortgage loan balance on the
owners' primary residence. Allowing this would add billions of
dollars in liquidity into the mortgage market without the immediate
risk of higher taxes to "bail out" risky mortgage market
participants. It would also greatly increase the equity that
"Responsible" Americans have in their homes and would help deleverage
mortgage lenders; hopefully opening up credit for a larger number of
individuals that need to refinance. In the near term, this move
would
have little impact on tax revenues, because the dollars used to pay
down our mortgages weren't being taxed (currently) anyway. If there
are concerns about raiding retirement funds...a catch up provision
could be added to the plan to allow excess contributions to the
individuals' retirement plans. The individual American Citizen wants
to do their part to fix the situation, but let us do it on our own
terms, let us take a tax free/penalty free distribution from our
retirement investments to pay down our mortgages..=94
Kip in Kalamazoo
