Obama giving 12 month grace period for those defaulting on their FHA loans (NAFTA, solutions)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
So banks are reducing principle on mortgages and now the FHA is giving a year free of mtg payments ?
WTH am I doing wrong here ???????
Why are all the wrong people getting bailed out ?
If anything the FHA should take back the house and then rent it to them. If these people cannot afford the mortgage they sure as hell can't afford to keep it in good working condition either.
So banks are reducing principle on mortgages and now the FHA is giving a year free of mtg payments ?
WTH am I doing wrong here ???????
Why are all the wrong people getting bailed out ?
If anything the FHA should take back the house and then rent it to them. If these people cannot afford the mortgage they sure as hell can't afford to keep it in good working condition either.
And they still won't be able to afford it in a year either.
Did you know that through HAMP once your mortgage is reduced the bank gets $1600 bonus from fannie and something like .20 on the dollar of amount reduce. The borrower gets their payment reduced and if they follow their plan get a $1000 reduction in principal on their mortgage for every year they stay current up to five years. So you get a lower payment and uncle sam kicks in another five grand off the top of your mortgage to boot if you make em. Man I may go tell my boss off tomorrow and sign up.
I can see the Keynesian reasoning of delaying more foreclosures so that those homes won't hit a already over saturated market. They figure by keeping these homes off the market home values will stop decreasing. You have to give Obama and his Keynesian buddies some credit with one stone they killed 3 birds:
1} it could help home prices stay stable.
2} there will be less foreclosures in the second half of 2011 and all of 2012
3} it will give Obama talking points when he is running for POTUS
None of this of course will do no good, the fact is the housing bubble is not coming back no matter how much they try to inflate it will fail.
Yeah the OP writes what his emotions say and doesn't think things through. It's funny how someone thinks that a keyboard makes them know more about a given issue than the banking, real estate and financial industries. Were we to do what he is suggesting then the real estate mess would be worse.
I wonder if we can get an IQ testing captcha added as part of the posting process.
Realize most if not all government housing relief programs have backfired.
1. 30-50% of home modifications fail within one year.
2. 2007 Mortgage and Forgivness act has actually contributed to the distressed properties by letting "short sellers" off the hook. Previously a short seller would owe a 1099c tax liability for the amount of debt forgiven. Pretty bid deterrent to not do a short sell. But not that government has passed this temporary law, it's worsen by the housing market by putting more homes at distressed prices onto the market.
Either just have home foreclosed or declare BK. The government has let short sellers rebuy homes with FHA loans if they never missed a payment or even if they miss payments for over 3 years, they can still buy a home within 3 years of a short sell.
3. First time homebuyers $8000 credit. This artificially created a bump in sales but what happens when the credit ends? Sales tanked
I could go on and one. We just need to let the free market decide when the market hits bottom.
Now with government letting unemployed people with FHA loans go a minimal of 12 months with zero payments before even starting foreclosure proceedings. This is not going to improve their chances of keeping their property. It's just delaying things. People need to fall before they are able to get back on their feet.
Just look at extending unemployment benefits for up to 99 weeks. It's just human nature to really not start looking for a job until benefits are about to expire. I recently met someone who went through one of the government's housing program. He's laughing to the bank. Because he was able to get his $100K home equity loan (which he used on vacations/luxury expenses/kids private school education) plus his main mortgage off his back. Plus he got $3000 to move out. I'm not sure if it was the HAMP or some other program but they forgave him on all his home equity and first and second mortgages.
He hadn't paid his mortgage in over 36 months. It's just crazy. People will never learn if government gives them an out.
This shows jusy now bad his polices are that he has no plan other than kicking the can down the road and building more debt. Like that is 12 months more of recovery stand still.
Gov't to ease foreclosure rules for unemployed - Yahoo! Finance (http://finance.yahoo.com/news/Govt-to-ease-foreclosure-apf-1443484881.html?x=0&sec=topStories&pos=2&asset=&cc ode= - broken link)
Great, the new housing plan now calls for letting those with FHA loans to get a minimal 12 month grace period BEFORE foreclosure proceedings began. (FHA loans are govt backed loans where you don't need to put down more than 3.5% down on your home).
This housing mess is getting ridiculous. With each government new program, it just makes the full recovery much worst. It started with Bush 43's 2007 mortgage and forgiveness act which essentially made short sells popular. Before that law, if you short sold your house, you would have a tax liability for the amount shorted. So short the bank $100K, you end up owing the IRS $33K on the taxes. Pretty big deterrent don't you think? I do. That's the way it should be. Or declare BK and discharge the debt. Very quick and simple. You have so many people gaming the short sell rule and literally hiding money each month because they aren't paying any rent or mortgage.
Look I understand people need help. Help those who actually can pull themselves through. But government program after government program will keep on bringing in people who will try to game the system.
This FHA new initiative 12 month grace period is just going to encourage more and more people to default on their loans and essentially live 2-3 years "rent free."
What next? Principal mortgage reduction? It basically penalizes the family down the street who put 20% down and pay into the principal each month while giving those who have no skin in the game a free ride.
Just make government backed housing loans like government student loans. There's a reason very few default on their government student loans....they can't even in bankruptcy. Short of death, you can't can't walk away from a student loan backed by the government.
Well Section 8 has worked out well, I'm sure this will too.
I think banks actually don't want the things right now. Home sales are crap. They will just sit empty. Going through HAMP or whatever they still be incentive money from the government and folks still pay something. The FHA deal sounds like they just give em basically grace for a year then payments continue. Banks have enough bad PR with all the crap they been pulling so may as well let em stay there and see what happens with the economy. It picks up steam in a year they'll just strt throwing folks out on their ears and sell the properties and claim the mortgage insurance to boot.
Yes he is all for that. Though it is sad that people are in this situation some lost jobs but others are just taking advantage of the situation and that is not right.
While there are those who are trying to work with their banks and the banks are making it very difficult to refi or modify their loans and the jumping through the hoops is ridiculous and they just give up.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
