Headlining the plan was a $75 billion Homeowner Stability Initiative, under which would provide incentives to lenders to cut monthly mortgage payments to sustainable levels. It defines this at no more than 31 percent of a homeowners income.
Oh great... this is just wonderful for all of the illegals living in 500k mcmansions.
I could see the call now...
"Whats that pedro? your mortgage is for 500,000 and you only make 8.00 an hour working at Mcdonalds? Ok no problem... We will make your mortgage payment 333.00 a month (31% of your income) Enjoy your house and low payment.
Sounds like a great plan, I want to go out and commit mortgage fraud today!
Wednesday, February 18, 2009
Homeowner Stability Initiative
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3 comments:
In response to the criticism of allowing people that had no business buying their homes in the first place.....
I am thinking of walking out on my mortgage, a deed of foreclosure. And I am no freeloader!!!
My house is worth so much less than I owe that’s it’s just not worth it.
About$115,000 less than what I paid for it, about $70,000 less than what I owe! And with an Interest Only 5Yr Arm Mortgage coming due in 2.5 years. Preserving my credit score is just not worth never getting ahead!
This package might just provide assistance for someone that works hard and wants to pay their bills? What’s wrong with homeowners simply not wanting to go under?
I bought my house at the peak of the housing “bubble”, 2006, with an Interest Only 5Yr Arm Mortgage and an Interest only 10yr ARM HELOC. The kicker is that I didn’t need creative financing. I currently have excellent credit, HAD enough money to put 20% down, and have steady income to make even higher payments with my debit to income ratio.
Why should I keep paying on something that only the banks benefit from? I am just paying INTEREST. For what, as mentioned above, I didn’t need creative financing. The banks are the only ones who benefited here. The banks have gotten a bailout to top it off, while I am the next wave of the housing crisis. But because I haven’t defaulted I can’t receive assistance.
I personally know five other people in my situation. We are the next wave of financial crisis that everyone will see for years to come.
If you didn't need creative financing, then why did you use it?
Well, this initiative de-facto convertes all the "homeowners" that are "underwater" into renters with the rent equal to 31% of their income - actually, a very logical thing to do, and I think it is the right choice.
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