Sen. Michelle Reagan, R-Scottsdale, should be commended for her efforts to address our state's housing crisis. Unfortunately, like all the other elected officials, including those in Congress and the White House, her proposal misses the mark.

First of all, the program would only be available for those "underwater" homeowners who were current on their mortgage payments. The truth is that the vast majority of homeowners in trouble are those who are behind on their mortgage payments. In many cases, the banks themselves are responsible for these homeowners being in arrears. Forget what you have been told: Banks will not consider homeowners for a loan modification or a short sale unless the mortgage payment is at least 60 days delinquent.

Why would Reagan be so concerned about homeowners who may be underwater but are current on their mortgage payments? All these people need to do is continue making their payments that they obviously can afford until the real estate market recovers. These homeowners are not the ones in danger of foreclosure.

Why would lenders, already swamped with foreclosures and short sales, consciously agree to sell off at a discount their performing loans? This proposal is similar to a "by invitation only" bailout for private investors.

It just doesn't make any sense to me why the banks won't just write down the existing loans to fair market value for those underwater homeowners and call it day.

Frankly, I'm concerned that Reagan's proposal has the potential of creating a new class of predatory lenders. Under Reagan's proposal, homeowners approved for this program would have to sign away their "anti-deficiency" rights in order to protect the private investors and ensure they can recoup any losses in the event that they have to foreclose on refinanced homes. Are you kidding me? Who in their right mind would sign up for such a thing, especially given the fact that the whole program is predicated upon home values recovering in the near future? What if they don't? In addition to bailing out private investors are we not also bailing out lawyers as well? I can imagine these refinanced homeowners being pushed into Chapter 7 bankruptcy as their only option from being taken apart by these new predatory lenders.

Of course none of this may ever occur due to the fact that under Reagan's proposal investors stand to make only about 3 percent to 5 percent on their money each year. Why wouldn't they just continue to buy foreclosures on the courthouse steps and "fix and flip" them for 20 percent to 30 percent profit margin on each one? Remember ... it's all about the money!

Finally, Reagan goes on to propose that properties at risk be classified as "Deemed Foreclosures" in order to force banks into giving up control of these underwater mortgages. So how does a homeowner gain such an ignoble recognition when they are current on their mortgage? Does it only have to do with these homeowners being underwater on their loan to value ratios? If so, I have a few hundred thousand Arizona homeowners who qualify for this recognition but maybe not since most of them are already behind on their mortgages. Nice try Sen. Reagan, but no cigar.

• Jon Beydler is a 32-year Valley resident and the former mayor of Fountain Hills who now lives in Chandler

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