Obama's mortgage plan up against fast-rising defaults
Refinancing and loan workouts are at the core of the fix. Some wonder whether it will be bold or swift enough to stabilize the market.
By Maura Reynolds
10:36 PM PST, February 18, 2009 LOS ANGELES TIMES (EXCERPTS)
The plan has two main elements aimed at the twin problems feeding the foreclosure crisis that is claiming more than 6,000 homes a day: "underwater" mortgages on which the balance owed is more than the current value of the property, and unaffordable loan payments that are forcing homeowners into default.
"All of us are paying a price for this home mortgage crisis," he said. "And all of us will pay an even steeper price if we allow this crisis to deepen."
One part would allow borrowers whose homes have lost value to refinance their mortgages at today's relatively low interest rates, even if the homeowner has little or no home equity left. To be eligible, borrowers must live in their homes and have a loan that is owned or guaranteed by Fannie Mae or Freddie Mac.
The opportunity to refinance will help "homeowners who have played by the rules [and] have been making their payments on time" but have been unable to refinance because collapsing housing prices have eroded the equity in their homes, said Housing Secretary Shaun Donovan.
*************************************************************************************
So, obviously, you have to read this carefully...
Part one says "borrowers whose homes have lost value..." ok, that's 100% of America!
I guess we all qualify so far!
"...even if the homeowner has little or no home equity left."
Well, anybody that bought their home in the last 3 years will have no problem covering
that qualification...
So..let's look deeper and see WHO REALLY QUALIFIES for this program...
(HINT: IT'S A LOT TOUGHER THAN THOSE "BAILOUT" BILLIONS...)
#1: The new programs are FOR PEOPLE NOT YET BEHIND IN THEIR PAYMENTS.
(therefore, this does NOT address the CURRENT Foreclosure problem, only the potential
EXPANSION of the current Foreclosure program...)
The plan is designed to help two kinds of homeowners. The first are people who took out prudent mortgages with a substantial down payment and have been making their payments, but who have little or no home equity because of falling housing prices. In the second group are borrowers who are struggling to make their monthly payments but would be able to make them if those payments were reduced.
So, to Recap:
What if I'm already in foreclosure?
It is up to your lender to decide whether it wants to participate in the program or not. The Obama plan will increase the financial incentives to the lenders to participate, if they choose to.
But again...it is up to your lender. A program by the People, for the People...NO!
Unlike foreclosure-prevention efforts, both of the new programs are available to people who aren't yet behind on their payments. In the loan modification program, the government will pay mortgage servicers an incentive fee -- $1,500 instead of $1,000 -- if they will modify a loan before a borrower can go into default.
Let me tell you now...THIS PROGRAM DOES NOT GO FAR ENOUGH TO DO ANYTHING FOR THE TROUBLES OF CURRENT REAL ESTATE MARKETS, INVESTORS OF RENTALS
OR AMERICA'S HOMEOWNERS...It is simply geared to PROTECT THE BANKS to turn as many potentially disasterous non-performing mortgages they cherry-pick into new business as conservatively safe performing mortgage portfolios and discard the rest.
...PERIOD.
This program will throw away truly troubled homeowners like a kid would toss the Baseball Card of a light hitting Shortstop with a .200 lifetime batting average aside and keep the Superstars.
One major problem is the Credit Card companies are now wrecking the credit of many solid
American's by cutting all their "unused" credit lines, without cause...thereby, in effect, "maxing" out their accounts and driving their credit scores down (any true Recovery Plan for America
MUST address the abuses of the Credit Card industry, it's rates and it's effect on credit).
Second major problem with the Plan...MOST OF IT IS ILLEGAL...
And, this is why we say the Obama Mortgage Program is a Scam.
IF YOU THINK YOU MAY BE A VICTIM...YOU WILL WANT TO SEE FOR YOURSELF
AND GET THIS INFO...
10:36 PM PST, February 18, 2009 LOS ANGELES TIMES (EXCERPTS)
The plan has two main elements aimed at the twin problems feeding the foreclosure crisis that is claiming more than 6,000 homes a day: "underwater" mortgages on which the balance owed is more than the current value of the property, and unaffordable loan payments that are forcing homeowners into default.
"All of us are paying a price for this home mortgage crisis," he said. "And all of us will pay an even steeper price if we allow this crisis to deepen."
One part would allow borrowers whose homes have lost value to refinance their mortgages at today's relatively low interest rates, even if the homeowner has little or no home equity left. To be eligible, borrowers must live in their homes and have a loan that is owned or guaranteed by Fannie Mae or Freddie Mac.
The opportunity to refinance will help "homeowners who have played by the rules [and] have been making their payments on time" but have been unable to refinance because collapsing housing prices have eroded the equity in their homes, said Housing Secretary Shaun Donovan.
*************************************************************************************
So, obviously, you have to read this carefully...
Part one says "borrowers whose homes have lost value..." ok, that's 100% of America!
I guess we all qualify so far!
"...even if the homeowner has little or no home equity left."
Well, anybody that bought their home in the last 3 years will have no problem covering
that qualification...
So..let's look deeper and see WHO REALLY QUALIFIES for this program...
(HINT: IT'S A LOT TOUGHER THAN THOSE "BAILOUT" BILLIONS...)
#1: The new programs are FOR PEOPLE NOT YET BEHIND IN THEIR PAYMENTS.
(therefore, this does NOT address the CURRENT Foreclosure problem, only the potential
EXPANSION of the current Foreclosure program...)
The plan is designed to help two kinds of homeowners. The first are people who took out prudent mortgages with a substantial down payment and have been making their payments, but who have little or no home equity because of falling housing prices. In the second group are borrowers who are struggling to make their monthly payments but would be able to make them if those payments were reduced.
So, to Recap:
- You can't be behind in your payments
- You have to be a Homeowner (Investors are on their own)
- Little to no Equity to qualify
- It offers to reset Interest Rates but not the Value of the property
- "Prudent Mortgages" with "Substantial Down Payments" to quality (Nobody qualifies!)
- Alternative Qualifiers are "borrowers who are struggling" but...
What if I'm already in foreclosure?
It is up to your lender to decide whether it wants to participate in the program or not. The Obama plan will increase the financial incentives to the lenders to participate, if they choose to.
But again...it is up to your lender. A program by the People, for the People...NO!
Unlike foreclosure-prevention efforts, both of the new programs are available to people who aren't yet behind on their payments. In the loan modification program, the government will pay mortgage servicers an incentive fee -- $1,500 instead of $1,000 -- if they will modify a loan before a borrower can go into default.
Let me tell you now...THIS PROGRAM DOES NOT GO FAR ENOUGH TO DO ANYTHING FOR THE TROUBLES OF CURRENT REAL ESTATE MARKETS, INVESTORS OF RENTALS
OR AMERICA'S HOMEOWNERS...It is simply geared to PROTECT THE BANKS to turn as many potentially disasterous non-performing mortgages they cherry-pick into new business as conservatively safe performing mortgage portfolios and discard the rest.
...PERIOD.
This program will throw away truly troubled homeowners like a kid would toss the Baseball Card of a light hitting Shortstop with a .200 lifetime batting average aside and keep the Superstars.
One major problem is the Credit Card companies are now wrecking the credit of many solid
American's by cutting all their "unused" credit lines, without cause...thereby, in effect, "maxing" out their accounts and driving their credit scores down (any true Recovery Plan for America
MUST address the abuses of the Credit Card industry, it's rates and it's effect on credit).
Second major problem with the Plan...MOST OF IT IS ILLEGAL...
And, this is why we say the Obama Mortgage Program is a Scam.
IF YOU THINK YOU MAY BE A VICTIM...YOU WILL WANT TO SEE FOR YOURSELF
AND GET THIS INFO...
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