I understand the disgust but I had an additional thought after hearing the details of the plan on the tube this morning.
The plan is only for Fannie/Freddie compliant loans, only loans under 415, only helps for the portion of the loan that is in excess of the house value, only serves as an incentive to the lender, not a requirement...etc, etc.
I think this will be used for only certain select instances and as a program will have half its cost eaten up by the Federal staff trying to administer it. I think it will solve a tiny percentage of the problems out there a a nice big cost — sounds like a Democrat plan to me — all show and no substance at a big government program cost.
When I drove my car off the lot I owed more than it was worth. Can I get you to make the payments for me?
KC Burke wrote:According to the info posted on the Whitehouse.gov website (See "Help For Homeowners" for text and discussion), the refinance assistance for people who are current on their payments is for Fannie/Freddie loans only.
The plan is only for Fannie/Freddie compliant loans, only loans under 415, only helps for the portion of the loan that is in excess of the house value, only serves as an incentive to the lender, not a requirement...etc, etc.
But the assistance for "Borrowers Who Are at Risk of Foreclosure" includes forced interest rate reductions, and provisions that payments will be limited to 31% of the borrowers current income (no matter their income when they signed the mortgage contract, or any of the provisions of the contract). If I read it right, the lender must come down to current market rates for fixed rate loans. No ARM adjustments up any more. And if the 31% of income is still below the payment, then the feds (us taxpayers, that is) pay half of interest rate cuts below market, or the feds (us taxpayers, that is) pay half of principal writedowns. And the feds (us taxpayers, that is) kick in $1,000 toward principal each year if the borrower makes all payments on time, up to $5,000 over the first 5 years.
acoulterfan wrote:For those at risk for foreclosure, principal write down is an option. The lenders will be required to get payments down below 31% of the borrower's current income (presumably their unemployment benefits if they are unemployed). They can do this by a combination of interest rate cuts and possibly principal write downs. The interest cut down to market rates for fixed rate mortgages come 100% out of the lender's profit. If the interest rates is cut below market rates, loss is split between the taxpayers and the lenders. And the taxpayers pick up half of any principal that is written off.
This will include reducing PRINCIPALS!
I think this will be used for only certain select instances and as a program will have half its cost eaten up by the Federal staff trying to administer it. I think it will solve a tiny percentage of the problems out there a a nice big cost — sounds like a Democrat plan to me — all show and no substance at a big government program cost.
You're exactly right.
I am one of those homeowners in Phoenix who is "underwater," mostly due to three foreclosures in my (almost brand new) neighborhood. I'm not having any problems paying my mortgage NOW... but my problem is that I took out a 5 year, which expires just down the road a bit, because I originally wasn't planning on staying here over 5 years. Now that I'm $30k underwater, I won't be going anywhere anytime soon. No one at my mortgage company will even talk to me about a refi since I can't "declare a hardship."
The issue for me is that I can foresee that in the future when my rate expires, after this moron absolutely destroys the American economy, I won't be able to get an interest rate under 10% and will then lose my house.
What has The O HolyO Messiah done for people like me (and I know about a dozen others just like me)? NOTHING. The people he will help is those who shouldn't have been purchasing a home in the first place.