Housing Rescue Plan: For Some or For All?
Vague reports about the Obama administration’s plan in the works to help people in danger of losing their houses are starting to surface. Whether it ends up with the government subsidizing monthly payments or modifying the loans themselves, the big question, it seems to us, is whether the ultimate solution should address only those in…
Vague reports about the Obama administration’s plan in the works to help people in danger of losing their houses are starting to surface. Whether it ends up with the government subsidizing monthly payments or modifying the loans themselves, the big question, it seems to us, is whether the ultimate solution should address only those in immediate trouble or be an across-the-board relief measure. On the one hand, even if you’ve been playing by the rules and aren’t directly benefiting from a homeowner bailout, it’s still in the interest of your own property value to see fewer foreclosures and empty houses in your neighborhood; on the other hand, why should only the irresponsible and the unlucky get hand-outs? Tough stuff.
Ringo that sounds like a plan but it does not include people whose FICO’s took a nose dive after a job loss. I would prefer to see a plan where everyones interest rate is lowered to 5% with those who have FICO scores above 700 getting even lower rates. This would help most of my clients who once again were laid-off and have since found employment but aren’t making as much as before. Many of them have high interest rate mortgages and an interest rate reduction would make their mortgages affordable. The banks would still make their money on these loans.
“also tax dollars to subsidize education for the economically disadvantaged is totally different than tax dollars used to subsidize’s gigantic soaking tub and gigantic great room.”
It’s all the same when the recipients don’t uphold their end of the deal and taxpayers are left holding the bag.
If Putnamdenizen were here today, none of us would have any money left after taxes to buy anything, no matter how hard we worked.
I’m with you MM…
I have to say — it’s heartwarming to see that the complex concept of “society” is so well and widely understood. Yeah, let’s just let people who aren’t us be kicked to the curb — it surely will not end up affecting me, right?
Owner of 10 Oak Street: Put 20% down, drives an old clunker, rarely eats out, “vacations” at Coney Island, puts money in a 529 Plan, makes every mortgage payment. This guy gets nothing.
Owner of 12 Oak Street: Put 0% down, leases a BMW, blows money in Vegas, cannot make mortgage payments. This guy gets a bailout.
Think about it.
There is a BIG difference between foreclosure due to greed in RE speculation, or living way above one’s means, and foreclosure due to losing your job, or medical disaster, or predatory lending. I’m far less charitable to the first two, far more inclined to see programs that would help those who are impacted by forces much greater than themselves, or who were tricked into unaffordable loans. If means are taken to separate the two, and money or foregiveness is not just blanketly handed out, it could work. I’m afraid there are far more people who fall into the latter categories than we think. It’s a big country, and some areas are hit far worse than here.
This discussion is not particularly relevant to the high-end Brooklyn market. Foreclosures are not the story here, nor do I think they will be. Loss of purchasing power and loss of inertia will be the primary drivers of the reduction in Brooklyn prices. Don’t expect foreclosures to happen here like they have in Florida, California, etc.
What about the good people who pay there bills on time have had good credit all of sudden you lose your job have not been able to find a new one and have kids at home, now what?
It’s ok that they lose there home… I think there has been a fine line.
No one said it was going to be easy. We have dug ourselves on big hole and it is not going to be easy to get out of it. We are a nation that spends spends and spends and reality has hit and we just can not spend anymore. It sucks!!
ringo’s plan
3.5% 30-year mortgage rates offered in 2009 for primary/second/investment residences. Can get more than one but in total amount can’t exceed borrowers 4x annual hhi per last two year’s returns. Must have credit scores north of 700 (58% of americans have FICO scores at 700 or higher).
4% in 2010
4.5 in 2011
Let the people who are at least somewhat financially aware come to the rescue and reward them for it with favorable terms.
That’s the beginning and end of my stimulus package.