Thursday, February 19, 2009
The perpetual Obama spending spree continues. This time it’s a mere $75 billion to bail out “at risk” mortgage holders. What it boils down to is the American taxpayer is going to foot the bill for people that bought houses they couldn’t afford. Essentially, they’re being rewarded for making a bad decision. You gotta love Democrats!
Let’s dig a little deeper into this. When the housing market was booming, many people figured they’d have instant equity in their newly purchased home. They thought, “So what if it’s 60% percent of our income, we can refinance later and cash out the equity then buy something else we can’t afford. We’re on top of the world!”
Many of these same people bought adjustable rate mortgages. Why? Because the interest rates were considerably lower than taking out a conventional loan. And they needed any help they could get to keep the payments low on their extravagant homes. They didn’t do the math for the worst case scenario if the ARM went up. That would have required common sense and responsibility! So, people fond themselves locked into a mortgage that they clearly couldn’t maintain.
No one wanted to take responsibility. The banks were going through new loans quicker than Rosie O’Donnell going through a box of Krispy-Kreme’s. They didn’t care, it was easy money. Borrowers wanted their dream homes regardless of the cost. And they got it!
In the past, if you didn’t pay your bills for whatever reason, your house was foreclosed on. As a result, you had to fight the neighborhood scavengers for your possessions that now littered the street in front of your former residence. Today things are a bit different. Uncle Sam has got an offer that you can’t refuse.
If you owe more on your home than it’s presently worth, you’re in business. You’d be a fool to make another payment at this point. Essentially, the government is going to come in and calculate the current value your home. They will tear up the old contract and give you a new mortgage based on the new value. For instance, you bought a house two years ago for $500,000. The present value has been determined to be 380,000. You currently owe $480,000 on it. You’re in business! Uncle Sam will knock off $100,000 and give you a new low interest mortgage based on the new appraised value..
There’s also another option. If your mortgage currently makes up forty or fifty percent (or more!) of your monthly household income, the rescue boat is on it’s way. Your loan will now be lowered until it’s 31% of your income. This is good stuff!
Wait, we’re not done yet! If you make payments on time for a whole year, you’ll get a $1000 bonus! And the lender will get $1500! It makes no difference that stupid decisions got you in the original mess. No problemo (as they say in the States). The government likes stupid decisions and they love to reward them!
Many of these people defaulted on their original loans. I have to wonder how many will default on the new loans as well. The whole plan seems like it’s destined to fail. And once again, it will be the taxpayer left holding the bag.
Hey look, I don’t want to see anyone lose their home. It’s a horrible thing. And on a personal level, I do feel bad for anyone in this situation. But here’s my issue. I have been in my house for fifteen years. I have never been late with a mortgage payment. I was responsible and bought a house that I knew I could afford. So, where’s my break? Why can’t I get a piece of that government action? Shouldn’t responsibility have some benefits? Not only don’t I get a break but I have to pay for the irresponsible people with MY tax dollars! That’s what really pisses me off!
KW
Let’s dig a little deeper into this. When the housing market was booming, many people figured they’d have instant equity in their newly purchased home. They thought, “So what if it’s 60% percent of our income, we can refinance later and cash out the equity then buy something else we can’t afford. We’re on top of the world!”
Many of these same people bought adjustable rate mortgages. Why? Because the interest rates were considerably lower than taking out a conventional loan. And they needed any help they could get to keep the payments low on their extravagant homes. They didn’t do the math for the worst case scenario if the ARM went up. That would have required common sense and responsibility! So, people fond themselves locked into a mortgage that they clearly couldn’t maintain.
No one wanted to take responsibility. The banks were going through new loans quicker than Rosie O’Donnell going through a box of Krispy-Kreme’s. They didn’t care, it was easy money. Borrowers wanted their dream homes regardless of the cost. And they got it!
In the past, if you didn’t pay your bills for whatever reason, your house was foreclosed on. As a result, you had to fight the neighborhood scavengers for your possessions that now littered the street in front of your former residence. Today things are a bit different. Uncle Sam has got an offer that you can’t refuse.
If you owe more on your home than it’s presently worth, you’re in business. You’d be a fool to make another payment at this point. Essentially, the government is going to come in and calculate the current value your home. They will tear up the old contract and give you a new mortgage based on the new value. For instance, you bought a house two years ago for $500,000. The present value has been determined to be 380,000. You currently owe $480,000 on it. You’re in business! Uncle Sam will knock off $100,000 and give you a new low interest mortgage based on the new appraised value..
There’s also another option. If your mortgage currently makes up forty or fifty percent (or more!) of your monthly household income, the rescue boat is on it’s way. Your loan will now be lowered until it’s 31% of your income. This is good stuff!
Wait, we’re not done yet! If you make payments on time for a whole year, you’ll get a $1000 bonus! And the lender will get $1500! It makes no difference that stupid decisions got you in the original mess. No problemo (as they say in the States). The government likes stupid decisions and they love to reward them!
Many of these people defaulted on their original loans. I have to wonder how many will default on the new loans as well. The whole plan seems like it’s destined to fail. And once again, it will be the taxpayer left holding the bag.
Hey look, I don’t want to see anyone lose their home. It’s a horrible thing. And on a personal level, I do feel bad for anyone in this situation. But here’s my issue. I have been in my house for fifteen years. I have never been late with a mortgage payment. I was responsible and bought a house that I knew I could afford. So, where’s my break? Why can’t I get a piece of that government action? Shouldn’t responsibility have some benefits? Not only don’t I get a break but I have to pay for the irresponsible people with MY tax dollars! That’s what really pisses me off!
KW
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