I will post more details as they become available. But the thrust of the plan is simple. Help homeowners who are underwater or can’t afford the monthly payment.
* Enable refinancing for 4 million to 5 million “responsible” homeowners who took out conforming 30-year fixed mortgages with an 80 percent or lower loan-to-value ratio and are current on payments.
* The decline in home values means many of these families cannot qualify for conventional refinancing because their loan-to-value ratio would exceed 80 percent.
* The program would allow mortgages owned or guaranteed by Fannie Mae and Freddie Mac to be refinanced, reducing monthly payments.
But how is this fair? And doesn’t this just disrupt the housing market. And for what, for whom?
Last night CNBC’s David Faber made an appearance on Hardball and discussed the current financial crisis. Chris Matthews, and he wasn’t wrong, lays much of the blame on Countrywide but believes homeowners are innocent because they were duped.
Not so says David Faber. To be sure there were some who were poor … but the majority knew exactly what they were doing.
Adding fuel to the fire … Jeremy Brandt of 1800 Homeowners says … homeowners in California who could pay their mortgages, but whose homes are currently underwater (owe more than they are worth) are deciding to hold back to take advantage of the Obama plan.
Great … so we help the irresponsible become more irresponsible while we continue to toil for the irresponsible and us. Nice. Welcome to the new government controlled financial sector.