Obama plans to subsidize mortgage payments of underwater homeowners

[30ashopper]

WASHINGTON (Reuters) - The Obama administration is hammering out a program to subsidize mortgage payments for troubled homeowners who have gone through a standardized re-appraisal and affordability test, sources familiar with the plan said on Thursday.

The program would be a major break from existing aid programs, which are triggered once homeowners fall into arrears.

Under the plan being contemplated, mortgage companies would use a uniform eligibility test even before a borrower becomes delinquent, sources said.
The administration hopes the mortgage industry will soon agree to a set of standards that will allow it to move quickly to modify many home loans.

Obama eyes home loan subsidies in rescue plan: sources | U.S. | Reuters

From what I'm hearing cnbc, basically if you qualify, the overall debt is reduced, the mortgage payment is reduced, and then the government will begin making partial payments on your loan for you. The cost is unknown, but it's not part of the existing stimulus, so it'll have to be in another spending program yet to be announced.

 

[Cheering472]

Obama eyes home loan subsidies in rescue plan: sources | U.S. | Reuters

From what I'm hearing cnbc, basically if you qualify, the overall debt is reduced, the mortgage payment is reduced, and then the government will begin making partial payments on your loan for you. The cost is unknown, but it's not part of the existing stimulus, so it'll have to be in another spending program yet to be announced.

Sweeet! Any help for me?? I've bought only the house I could afford and paid my house payment on time every month. I'd like my mortgage debt and payment reduced. This is giving me a headache.

 

[Lynnie]

Yes, tempting indeed......there will be a lot of this thought and unfortunately a lot of it will be followed through as well.......I hope the uniform eligibility test is a strong one!! :shock:

 

[30ashopper]

Yes, tempting indeed......there will be a lot of this thought and unfortunately a lot of it will be followed through as well.......I hope the uniform eligibility test is a strong one!! :shock:

I hope the legislation requires a vote in congress and gets shot down completely. This is rediculous, why am I subsidizing other people's mortgages? I have a house, I took out a mortgage, I paid it off completely. Where's my refund check?

 

[scooterbug44]

Sweeet! Any help for me?? I've bought only the house I could afford and paid my house payment on time every month. I'd like my mortgage debt and payment reduced. This is giving me a headache.

Ditto - Can I get a check so I can buy all the stuff I did without to keep my credit score up and my bank account w/ a positive balance? :angry:

I don't have a problem adjusting mortgage terms, but if the government starts making people's payments there had better be some wage garnishing etc. in these people's futures!

 

[Lynnie]

Well, we are indeed an Entitled Society.

I think we should start a new club

 

[TooFarTampa]

I hope the legislation requires a vote in congress and gets shot down completely. This is rediculous, why am I subsidizing other people's mortgages? I have a house, I took out a mortgage, I paid it off completely. Where's my refund check?

Whaaaat?? I agree this is a ridculous idea.

The best solution I have read is to allow homes to foreclose and give the former owners the option to rent at market rates. I don't mind some loan modification either (ie better rates) but rewarding people who clearly couldn't afford their home according to normal standards with subsidized payments???!?!?!

 

[pgurney]

Geez, this is getting crazy.

If this does pass for some reason, I hope it comes with a lien on the house for the subsidies plus a 1099 on them too. There's too many people that are being left unaccountable for their decisions and that is hurting a lot of well-intentioned people right now.

 

[scooterbug44]

Unfortunately there are some people out there who REALLY need a tough love lesson in finance so we can get through this and CHANGE the way things are done in the financial world and at the kitchen table so it doesn't happen again.

If there are ways to readjust mortgages so that more people can manage to stay in their homes, that's great, but simply paying people's mortgages for them and removing the consequences of bad financial decisions is NOT the way to go.

If someone is going to lose their primary home because they lost their job and after exhausting their options they can't make payments, I would support helping them. The people who bought a house they couldn't afford to go with the car they couldn't afford, the jewelry they couldn't afford, etc, borrowed too much against a home they hadn't even begun to pay for, or who want others to clean up their mess once again - nope!

 

[Mango]

Maybe, after running the numbers, it was fiscally more prudent to go this route vs. buying up toxic assets later. Although it doesn't seem fair to subsidize people who made poor choices or took liar loans, there are probably many people, considering the high unemployment numbers, who are having a tough time meeting the payments now and can't sell. Try to look at it that way vs. a liberal handout. Also, if the judges can modify the loans, the Banks could in essence try to prove that the Borrower made faulty statements on their initial app. I have always had reservations about judges partaking in modifying loans, but if they work closely with the servicer, hopefully some of the true slackers may not get the mod done.