The Homeowners Are Querulous About Being Bailed Out from Foreclosure Trouble
The homeowners are now querulous about being really bailed out from their foreclosure troubles. It has been a question on everybody’s lips since the crisis began surfacing about two years ago – is there no help? Today there is loud talk about government pouring in trillions of dollars but the question remains the same with the individual. How far will things ease for the person and his family? So far not a drop has trickled down to the taxpayer.
The growing opinion from a cross section of the public is that since the lenders and borrowers kicked off this crisis it is up to them to resolve it. The collapsing market is pulling down the economy and even affecting global matters.
The increase in number of foreclosures means that the banks are not getting their monthly payments. When they foreclose they have to sell the house at tremendous loss. If the borrowers manage to refinance then they would be able to afford the houses at this lowered cost. Refinancing is the problem since the house has become less than the loan amount.
Unemployment has added to the problems of the borrowers. Without jobs they cannot afford any monthly payments whatsoever. Consequently there are more foreclosures. To complete the vicious circle the consumers are cutting down drastically on spending and further pulling down the economy.
On one point everybody – the homeowners, lenders, community groups and government officials at all levels, agree that so far none of the measures that have been initiated are working. The new administration is trying to take more aggressive steps – the details not being disclosed as yet. Meanwhile jumbo banks together with Fannie Mae and Freddie Mac have put on hold foreclosures waiting for Washington to come forth with the details of the foreclosure prevention plan.
One of the thorniest issues has been about the injustice being done to those homeowners who have struggled to keep their mortgage payments running. Their pertinent question is that why should the money they are paying as taxes go to pay the mortgage of somebody else while they are battling to keep their own commitments. The White House is taking into consideration this angle of the problem.
One step being thought of is that the government would purchase the underwater mortgages by getting a discount from the mortgage holder. Then the government would refinance the mortgage based on the current market value so that the mortgage payments will lessen. These less risky loans would then be resold to the investors.
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