Subject: Comments for File Number S7-12-11

May 23, 2011

Iím writing because my family and I were affected by the economic collapse of 2008, and we donít want it to happen again. I was lured into getting a $250,000 mortgage in 2005 I couldn't afford by an economic system that said not only that home prices would never fall, they would only level off, but if people just graduating college like myself should hurry and buy or we may get priced out of the market. Also, financial advisers at the time said to extend yourself a little further than you were able to since it was such a good investment. Come to find out within a year after I had purchased a home I couldn't afford and since the value dropped so rapidly, I was stuck in it for 30 years. Then the government bailed out the banks and left the homeowner hanging so in order to stay afloat I used readily available credit cards and student loans to supplement my income, incurring massive debt. For years I stayed current on my mortgage while sinking further and further into debt. Finally when I maxed out all my options, I tried to start working with the bank, including applying to government "assistance" programs like the Making Homes Affordable Program. Amazingly, the limits were so strict and unreasonable I didn't qualify for anything. I tried to work with government and the bank to stay current and work something out that would be beneficial to everyone but once again the system failed me. I was advised, by the bank and the government that I had to be late on payments before they would work with me. Eventually I did and eventually had to start foreclosure hearings before they finally approved my short sale for $90,000, after 20 months of constantly resubmitting "lost" and outdated personal information. To summarize it was absolutely the most stressful thing in my life and I wouldn't wish it on anyone.

Wall Street greed and outrageous pay practices were a major cause of the collapse since the drive to get more and more mortgages drove everyone to take advantage of the inexperienced public. One way to change the incentives so they donít collapse our economy again would be to delay the bonuses for several years, at least five or seven. That way, weíll know if the loans they made in year one remain good. In the bad days, bankers paid themselves on the volume of loans (mortgages) they generated, not on their quality. Or better yet, why not limit executive pay, so unbridled greed doesn't take over again, creating the potential for any regulation that's put in place to be circumvented in the future. Regulate the entire mortgage/finance/investmen industry so people aren't taken advantage of. Create and enforce standards for mortgage approval. Force banks to work with people who are in trouble. The most important thing you could ever do is to prosecute those responsible for this enormous crime against millions of people!

Thank you for considering my comment,

Joseph Spector