A new idea from the Montandon campaign today.  The sum-up:

The Foreclosure Avoidance and Stabilization Today Program (FAST Program) utilizes a private insurance policy combined with a state government backed loan protection plan to address the current economic crisis in Nevada’s housing market. This plan will also provide an urgent solution to prevent further deterioration in the State’s housing market.

The problem to be solved:

As ARM loans readjust homeowners are unable to refinance due to the homes negative equity. The current system fails to recognize the real problems facing homeowners; banks are unwilling to talk with homeowners until the home is in default, and even after default banks lack a financial solution to address the current market realities. Banks are unable to refinance the loan because the current market value of the home is less than the amount owed on the first loan. FAST encourages banks to work with homeowners through a private mortgage insurance backed through the full faith and credit of the State of Nevada.

Montandon’s solution:

FAST provides a government-backed guarantee on a portion of the loan that is unsecured by the market value of the home. Suppose that a home was purchased for $300,000 in 2005 on a 5-Year 0-Interest ARM, this summer the 5-year arm readjusts and the homeowner is unable to make the new payments. The home is now worth $200,000, and to refinance the bank will only make a loan on the value of the home, so the homeowner will have to come up with $100,000 to satisfy the original loan. Many Nevadans faced with this common scenario are forced into foreclosure. In this example, FAST would provide a guarantee on the $100,000 and provide a path for homeowners to refinance their home and protect the value of their neighbor’s homes by preventing foreclosure.

FAST is funded through private insurance premiums paid by participating homeowners in their loan closing costs and is not a taxpayer-subsidized program. Homeowners electing to save their home through FAST will pay an insurance premium used to satisfy the gap loan in the event that a homeowner forecloses on a FAST secured home. Nevada can protect the State’s housing market by preventing foreclosures from driving down the value of all homes in the state.

And the attempt at an inspirational closing:

FAST embodies the Nevadan ideal that people do not just walk away from their obligations:  they are “battle born” to fight to do what is right.

Some interesting ideas here.  And at least he has a plan for the foreclosure crisis.  Haven’t seen any from anyone else.