The benefits of the Appreciating America plan are significant. Families will remain in their homes. With the promise of shared appreciation and protection of capital expenditures, the homeowner will be motivated to maintain and improve the property. The existing lender will not have to incur large losses in foreclosing or agreeing to a short sale in a dropping market. In fact, the servicer will receive the entire available proceeds from the new FHA mortgage as repayment on their original loan and may realize the remaining balance through future appreciation. Property values throughout the US should stabilize. Together, these benefits should have a positive impact on the US economy while protecting it from further property value erosion.

An example of this transaction is as follows:

- Original mortgage(s) = $200,000

- Current property value = $180,000

- Homeowner qualifies for a new $153,000 FHA first mortgage (up to 85% LTV, to include closing costs and FHA insurance premiums) with existing servicer taking a $47,000 (plus amount of closing costs and FHA insurance premium) shared appreciation Appreciating America second mortgage.

- Current mortgage holder(s) get immediate return of $153,000.

- The $25,400 balance that is owed to the servicer becomes a shared appreciation Appreciating America loan secured by the property but with no payments due. Interest would accrue at a reasonable rate (6%).

- Property appreciates 3% per year over the next five years and is appraised at $209,000. Homeowner will qualify for a new FHA mortgage of approx. $203,000. The appreciation of $56,000 would be split with the homeowner getting $16,800 and the second mortgage holder receiving $39,200. The remaining principal balance owed on the second mortgage plus any accrued interest would be forgiven at that time.

The time is growing short and we need to act fast. The Office of Thrift Supervision suggested a variation of this, but included a new feature that will eat up valuable time during implementation. Appreciating America works and works well. Debate is a great thing but not when it comes at the expense of millions of homeowners. The Broken ARMs need more than a band-aid. Appreciating America is the remedy that can work.

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