Hope for Homeowners?
One of our regular readers, Matt, left this comment:
I’m curious if either of you saw the news release today where the federal government, Citigroup, Fannie & Freddie, and possibly a few other mortgage lenders are willing to negotiate with homeowners to restructure their current mortgage to prevent foreclosure.
We hadn’t really talked about the new “Hope Now” program that our government is rolling out, and I’d love to have your opinion on it!
Here’s the skinny:
- The goal is to put delinquent homeowners into new, “Long term sustainable mortgages” that they can actually afford.
- It will go into effect December 15th, 2008
- In order to qualify borrowers have to be at lest three months behind on their mortgages and still owe more than 90% of the total value of the mortgage itself.
- For borrowers who qualify, it will reduce your housing expenses to the point that it will not take up more than 38% of your total income.
- You could also have the option to extend your mortgage from a 30 year loan to a 40 year loan and make some of the principle mount owed interest free instead.
*facts from MSN money’s article “US Expands Program to Modify Troubled Mortgages“.
I would really love to know what you guys think about this plan? Is it a good one? It is undoubtedly helping the people who need it most (those going into foreclosure).
Here’s the rub, (for me at least). My husband and I are three years our of bankruptcy. We have been diligently working to recover our credit, and save enough for a reasonable down payment on a house. Before all of this mess started we considered getting a home, but we did not want to get locked into an adjustable rate mortgage – we were afraid of what would happen if our interest rates shot up and we couldn’t make our payments. So we rent….and we rent…and now thanks to the credit crunch, we will likely be renting for several years more.
So, it’s a little hard for me to watch our government bail out all of these people when we chose to be responsible, and avoid a mortgage we couldn’t afford. They get to keep their homes, while we will have to continue renting.
Is that jealousy? I’m sure that it must be. We went bankrupt. We’ve already played our bailout card, thank you very much. And, after all, we chose not to get into a mortgage before this mess, so why cry that we don’t have one now? In my heart I am very glad that people…families….will have an easier time of things. It’s not in me to want to see children put out into the streets because their parents made bad choices.
I just have to wonder…how far will these handouts go? Now I am hearing talk of the government bailing out the large auto manufacturers. Those companies have been in trouble for years. Yet right now everyone has their hand out, so why shouldn’t they do it too? After all…they do provide a lot of jobs here in America.
Has America truly become a welfare nation? Why are we turning to Uncle Sam to fix this problem? What happened to American ingenuity? What happened to the force and the spirit that our immigrant ancestors built this country on? Have we lost the American Dream because we felt like it was a God-given right instead of something to be sacrificed for?
What do you think?
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