Thoughts on the mortgage relief bill?

iVillage Member
Registered: 12-29-2008
Thoughts on the mortgage relief bill?
27
Wed, 02-18-2009 - 8:29pm

I'm curious how other members feel about Obama's mortgage relief proposal.


I have very mixed feelings about this.

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iVillage Member
Registered: 11-17-2007
Wed, 02-18-2009 - 9:10pm

There are a lot of good people out there that have lost

iVillage Member
Registered: 12-29-2008
Wed, 02-18-2009 - 9:57pm

Thanks for your perspective Mary Ann.


I am all for a case-by-case approach to this bill.

iVillage Member
Registered: 03-17-2003
Wed, 02-18-2009 - 10:27pm

It's still a voluntary program and that may be the program's fatal flaw.

iVillage Member
Registered: 12-29-2008
Wed, 02-18-2009 - 11:24pm

Carolyn (get my last email?)


My post wasn't intended as judgemental/mean-spirited about my "tax dollars."

Avatar for meandmypea
iVillage Member
Registered: 03-27-2003
Thu, 02-19-2009 - 1:31am

The summary of Obama's speech says:
"This initiative is intended to reach millions of responsible homeowners who are struggling to afford their mortgage payments because of the current recession, yet cannot sell their homes because prices have fallen so significantly." Unless I'm reading his speech differently, that doesn't seem to be "aimed to a very specific group...irresponsible homeowners and complicit lenders."

I am one of those responsible homeowners this bill is aimed towards. We didn't buy a house we couldn't afford. We didn't get some exotic mortgage with a hybrid ARM attached to it. We have never missed a mortgage payment. Neither DH nor I have lost our jobs (knock on wood). But we did have the poor timing to buy a house two years ago before the bubble burst.

When the 30-year fixed rates plummeted a couple of months ago, we tried to refinance our mortgage to get a lower rate. But our house is now worth $35,000 less than it was when we bought it, so what little equity we had accumulated in 2 years, was beyond eliminated. We're now under water, and we were told by the bank that it could 10 years (or more) before we would qualify for a refi if housing values kept dropping. But if we were to default on our mortgage for 3 months, we could have gotten it restructured through the mortgage forgiveness debt relief act that Bush implemented at the end of 2008.

The moral hazard implications you're worried about were there with the first debt relief act. What Obama mentioned today stops those who have been purposely defaulting on their mortgages in order to refinance their mortgage. Before now, that was the only way they could do it. I think rewarding responsible paying homeowners the ability to refinance for a change is a GOOD thing, and I'm excited about it.

Bridget




Bridget
iVillage Member
Registered: 09-22-1999
Thu, 02-19-2009 - 1:37am

I rent, and I own my old car.

Avatar for sullengurl
iVillage Member
Registered: 02-16-2004
Thu, 02-19-2009 - 7:23am

I feel the same way, littlebigs. We "own" a mobile home that we have a loan out on, but it's not a mortgage. We did this because when I found out I was pregnant 7 years ago (newly married), and we live in a high cost of living area, this seemed like the cheapest option....it most definitely was at the time, but now we still have a large loan and cannot get out of here.


So who is going to help us? The truth is that you cannot help everyone. Look at the way the banks got all that money and now other businesses/companies/employers etc. all have their hands out. We will all crumble if everyone takes, takes, takes....who is going to give? When will it run out?


I just want to keep our jobs so we can continue to pay off our debt. But it is looking more and more like my dh will lose his job come this summer and he is the primary breadwinner. Another case of

 


 



Avatar for colomom99
iVillage Member
Registered: 03-28-2003
Thu, 02-19-2009 - 7:54am

I do understand people's frustration for doing all the right things and feeling they are getting nothing for playing by the rules. But I think the problem is much more complicated than people doing the "right" things and the "wrong" things. Rush Limbaugh called people who might benefit from this bill "losers." I deeply resent that and think it is impossible to paint this into good guys and bad guys.

We bought our house at the height of the run-up. But we also had just sold for a large, frankly ridiculous, profit. We moved into a house $70K less than the one we sold. We put 20 percent down. We had two solid incomes. We had nearly 100K in our 401K accounts. Today we could lose our house. I lost my job 18 months ago which reduced our income by almost half. I could not find another job in my field. At 51 I now can't find a job anywhere, including retail. I freelance for about a third of my former salary. My husband is 60. His company just laid off more people yesterday including a man at the top of his field who is 62. The company is expected any day now to announce it is cutting everyone's salary by anywhere from 10 to 18 percent, making people pay more for benefits and requiring unpaid furloughs. Our 401K safety net has lost more than a third of its value in the market crash. We no longer make enough money and have too high a debt to income ratio to qualify for a refinance. I don't see us as victims but I sure don't see us as losers or silly or irresponsible (except for the debt) or any of the other names being flung about. Two years ago I never, ever would have dreamed we would be in this mess. My friend up the street has a husband at the top of his field in aerospace. They are terrified he will lose his job. If he does they will no longer be able to afford the house they could easily afford when they bought it. They're not losers or irresponsible either.

This hurts everyone. Among those are renters. Landlords, especially are going into foreclosure at record numbers. When they do they toss tenants out with little notice. I understand people's anger. I am very angry at the banks who took money and then paid out bonuses to executives for a job well done. But this idea that this would not be happening to people if they had just been smarter is too easy and only divides people further. There are certainly speculators who made money off real estate and there are people who got in over their head but remember at the time everywhere you turned people were being strongly encouraged to buy by everyone from real estate brokers to mortgage lenders to even the financial gurus who are tut-tutting now.

OK I'll climb down from my soapbox. Whew.

Jenny

Avatar for colomom99
iVillage Member
Registered: 03-28-2003
Thu, 02-19-2009 - 8:13am
By the way, we have never missed a payment or even been late. It is a huge struggle every month but we do it. I'm glad, at least, this bill addresses the issue of not having to be in default and totally wreck your credit before you can be eligible for any kind of modification. I don't know if we'll apply but I just had to get this all off my chest. I'm calling a real estate agent today to look into putting our house on the market.
Thanks,
Jenny
iVillage Member
Registered: 08-22-2008
Thu, 02-19-2009 - 9:10am
I have my concerns too, mainly the debt we are incurring to accomplish these things.

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