Homeowners who are upside down in their homes but not in default are more than willing to take the risk on loosing their home because they are not eligible for the bailout money. I've read more than one news article saying that. They can rent a home across the street from where they are currently living and pay HALF the price of their mortgage.
So once again the people who need the help are being denied the help.
Homeowners who are unemployed and can not find work also are finding themselves not eligible for aid. So who does that leave?
It leaves the tax payers, once again, bailing people out who are in default but have income, for making bad, or unwise decisions when it came to buying a house. It makes for a lot of hard feelings. I can't get financing for a home, but yet I'm required to pay for other people's mistakes because they are in default?
If the government keeps this up, there will soon be a huge revolt.
The people who need help the most, once again, are getting shut out.
People who are unemployed need a grace period to be able to get employment so that they can have help getting back on their feet and able to take care of the necessities of life.
Stop and think about it, the people who are upside down, yes, help should be available to them too, if nothing else to cut their mortgage down to where the market is.
People who are unemployed should have a grace period of time so that they can find employment, even if it is part time, be able to have payments cut in half, or be able to skip payments without penalty, tack them onto the end of the mortgage.
People who are in foreclosure due to not being able to afford their homes, I think refinancing them and banks working with them to get terms that they can handle.
I do NOT think its right for tax payers to shoulder the burden of another 75 billion, when it only helps a select few.
In the end, because people don't qualify, and can never get their investment back, I foresee foreclosures continuing to happen at an alarming rate.
Mooch
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Comments: 11
Mooch
This plan is not fair. It rewards many who should not have bought homes. It rewards the banks for giving out bad loans. Bankers knew some of these folks could not pay. Not only did the banks got their bailouts under Bush, now this is also an indirect bailout to the banks.
HOWEVER, don't do anything and everyone suffers. Any foreclosure brings down the value of the home next door. So, we all tank together, or we bailout some of these folks who were gambling and lost.
I agree its a nasty catch 22, but who is really benefiting? The banks? Or the homeowners?
The "lenders" didn't really lend anything, they sold the loans off to somebody else and that entity securitized them, broke them up into little parcels and sold those to investors around the globe. Some of the people that buy the securities buy insurance or credit default swaps to protect that investment. There are rules on how the insurance and credit default swaps can be collected on and from what I hear, modifications are not covered, default is. So for some investors a modification may cause them to lose more than a foreclosure. In these cases, the investor might sue the entity that did the securitization so they are afraid to do it. And since the government just keeps handing money directly to the banks anyways they, don't really need to do anything. What you end up with is the servicer performs the foreclosure, the party that really doesn't have any thing to lose. And they actually *make* bonus money for performing it.
My understanding with the bankruptcy plan is the whole point of it is nobody will want to let it go to bankruptcy. When the judge carries the big stick, the banks should theoretically be very much interested in getting a deal worked out before getting whacked by it. Something else you should understand is that a huge quantity of the troubled loans, ARM's and balloons, have various different violations of TILA and RESPA and the banks full well know it. Hell, most of them don't even have the original note anymore! Any competent bankruptcy lawyer will pull all those skeletons out of the closet and the result will not be good for the lender!