Posted on 05/28/2009 8:04:13 AM PDT by Oldeconomybuyer
"I'm 200% innocent!" - O.J. Simpson.
"I agree with you 200%!" -- an anonymous FReeper.
:)
not to worry!:
“Homeowner Affordability and Stability Plan”
A day after signing his first $787 billion stimulus bill bailout, Obama announced his next bailout, $75 billion for an estimated nine million homeowners. Under the Homeowner Affordability and Stability Plan, which begins March 4, 2009, eligible homeowners can get their home loan interest rates lowered until their mortgage payments are no more than 31 percent of their income, and that new rate will then be good for five years. Additionally, after five years of making reduced payments, those homeowners will then receive up to an additional $5000 reduction in their payments. So how does the average American get in on this Democrat-legalized scam? No longer even making a pretense of helping the poor, Obama’s bailouts are going to corporations and the upper middle class who can afford to buy homes.
Obama said the bailout would apply to “families who have played by the rules and acted responsibly.” What exactly does this mean? This contradicts what the liberal San Francisco Chronicle admitted about the foreclosure bailout in an editorial, saying “some people who don’t ‘deserve’ to be helped” will be helped, and the “Housing plan must help the undeserving.” But if we’re to honor what Obama said, then any homeowner who qualifies in this time of economic downturn should also utilize the bailout.
According to a FAQ posted on the White House website, it is not necessary to be behind on mortgage payments in order to be eligible for the refi bailout, qualifying factors also include “a significant increase in expenses” or “an interest rate that will reset to an unaffordable level.” What the former means is that a family with a home mortgage could purchase a brand-new large, luxurious SUV, “significantly increasing” their expenses - and effectively get the brand-new SUV for free. For example, if a family bought a $200,000 home in 2005 at a 15% interest rate, and purchasing a new SUV added a new monthly payment that combined with their mortgage payment to equal significantly higher payments than 31% of their income, they could get their mortgage interest rate lowered to 2%, or whatever it took to get below the 31% threshold. If lowered to 2%, they would save $107,765.40 in interest payments over the next five years, enough to buy a fully loaded 2009 Cadillac Escalade.
Families that financed their homes with ARM loans, which begin with a low-interest rate that balloons in a few years into a high interest rate, are also entitled to a lower rate under Obama’s plan. Responsible homeowners who chose a fixed-rate mortgage from the beginning get no such relief - unless they go buy a pricey new SUV or otherwise “significantly increase” their expenses.
Homeowners who owe more on their house than it’s worth (up to 105%) and homeowners who have taken out a second mortgage on top of that are generally eligible for the bailout. The program is targeted at mortgagors whose loans are currently held with Fannie Mae or Freddie Mac, but many lenders are open to providing this screaming good deal if you call and just ask.
Obama asserted that the bailout will not apply to speculative investors, but that’s not accurate, since homeowners who bought multiple duplexes which they do not live in are eligible for a bailout of all the units as long as they label one unit their residence.
The homeowners who will be helped out by the bill aren’t really poor people - poor people generally live in apartments, they do not own houses and condos. The bailout applies to home mortgages worth up to $417,000 and up to $625,500 in “high-risk areas.” ( in “high-risk” Arizona, I could have bought 6 times as much house as I did and be entitled now to the same mortgage payments – all I can do now to benefit from it is buy a pricey SUV or “significantly increase” my living expenses like adding on a new wing to my home) It will help out homeowners who took on too much debt, or who “cashed out” thousands more than their original loan, putting them “underwater.” What Obama won’t tell you is that the vast majority of subprime loans went for refinancing, not initial home purchases. A lot of folks got too greedy and refinanced with an ARM loan or some other kind of loan too good to be true for their income and spending habits.
The fundamental problem with the foreclosure bailout is it encourages and perpetuates the type of behavior that contributed to the recession in the first place - enabling people to buy homes they cannot afford. Someone who bought a $400,000 home, refinanced it with a subprime loan in order to get cash back, putting them underwater, then bought a luxurious new SUV, should not be entitled to a free $100,000 bailout from the rest of us. What is going to happen to their $400,000 house in five years when the low interest rate provided by the bailout expires? South Carolina’s Republican Governor Mark Sanford says the bill rewards irresponsible behavior, since “95% of folks are playing by the rules and struggling, but are still paying their mortgages.” Minnesota’s Republican Governor Tim Pawlenty questioned the government’s involvement at all in private mortgage contracts.
Fortunately our good name in the industry has keep business coming our way. We had a most unfortunate group of employees steal from us at a Project. It was a complete nightmare. We are back to our bread and butter jobs. Kind of like starting over.
We keep enough operational monies around so vehicle repairs, vendor payments and lights and telephones can be paid on time. Priorities have a whole new meaning.
And no, we aren’t partying like it 1999.
A little Prayer never hurt anyone. Thanks!
“Those groups are all flush with cash, benefits, pensions and new facilities in my area. and to state the obvious; All strong supporters of Obama and socialism in general.”
Yep, they wear their Obama 2008 bumper stickers like a badge of honor.
Just got my annual impound statement yesterday. My payment is going up over $80/month because of—not the fixed interest rate—property taxes.
Thank you DC. My guess is that poster has never really been in a dire situation before. Lucky for him.
Priorities like children, business liabilities and in general keeping the lights on and business open might come as a shock to many like him when the money is gone.
I am quite optimistic but at the same time realistic as I lived through the Carter years and barely survived.
We'll see if that book Obama was reading during his campaign “Life AFTER America” comes to pass.
that which does not kill us makes us stronger. keep your chin up, it will get better.:)
“How long do you think you can do that, stiff them for the note payment?”
the alternative is they can foreclose on him which will likely take a year or two if he fights it. All the time he won’t make a payment. And then they can sell the house for 60% of what he owes.
Or they can work with him while he catches up.
Doesn’t sound like he’s doing it intentionally. The lender knows this is a risk when they finance a home.
Whats your problem with businesses dealing with the risk they accept and not just the rewards?
My sympathies. Going bust is a bitch.
“We had a most unfortunate group of employees steal from us at a Project. It was a complete nightmare. We are back to our bread and butter jobs. Kind of like starting over.’
Isn’t it fun, had the same thing happen to me. That and a customer who decided not to pay his very very large bill because of what the employees did.
If only we were union employees where every day was the same and we couldn’t be laid off.
“Thank you DC. My guess is that poster has never really been in a dire situation before. Lucky for him.’
Quick, you can pay your car payment on time or buy food/critical medicine for your family. What do you do?
I know where my priorities are.
Hey, I was just asking. I don’t have a problem. Actually if it takes a year it might be worth it. I just wanted to know, it could be me next.
I'm just asking a question, don't take it personally.
I’m not taking it personal; I was asking you a question.
The world aint perfect and stuff happens. The only people who don’t make mistakes are those who never take risks or do anything worth doing.
No problem here.
Ahh, madamemayhem... Words of wisdom are always a comfort. May G-d Bless you dear.
Thank you.
In my business I have had the privilege of prosperity and leaner years. When things came to an abrupt end do to several Owners/Engineers going bankrupt (no pay)then several “loyal employees” took advantage of trust, costing over $100,000 in additional labor, I did the unthinkable. I laid off a nonproductive employee (who later filed for unemployment benefits swearing he would not due to the fact that he had a small business on the side) and has collected for over one year rising my State and Federal Unemployment by 5%!!!!! The rest left on their own out of fear I hope.
I now own a productive Business as lean as you can get. I owe only a couple of outstanding vendors (a miracle at that) and have a small operational budget.
When you come to this point there is nowhere but up. Then again...
Thanks everyone for the opportunity to well, go back over everything. It has been quite an experience.
Assuming the political swine in Washington are unable to completely wreck our economy, I have a feeling you will succeed. Sometimes, it's better to be like Ford rather than GM. Americans, real Americans, still admire hard work, ingenuity and dedication.
Hang in there. You owe it to yourself.
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