Downsizing In Place 10 10 08

The document proposes a "downsize-in-place" solution called a Home Equity Fraction Interest (HEFI) that allows homeowners facing foreclosure to reduce their mortgage burden while remaining in their home. Under the HEFI, the lender would write down the mortgage to the current home value and take a fractional ownership stake in the home in return. This provides the homeowner relief and the lender mitigates losses. The solution benefits both parties and helps stabilize home prices and neighborhoods by avoiding foreclosures.