Millions Of Homeowners Don't Qualify For Obama's Mortgage Assistance Program

New York Times:

MESA, Ariz. - She had seen the advertisements for the new government program offering relief. She had heard President Obama promise that help was on the way for homeowners like her, people who had lost jobs and could no longer make their mortgage payments.

Read the whole story: New York Times

Comments

[Rapid Ray]

Let me see if I have this right....

The housing prices bubble up when speculators and banks get in on the market.

People buy homes they could afford.

Hank Paulson coughs up 3 pieces of paper and the US Government drops 800 billion bucks into the banking system so that they will be able to laon money.

The banks modify their lending rules so that people can't qualify for the loans and start foreclosing on homes for a fraction of what THE BANKS say they were worth a year or two ago.

Now the US Government offers the same "assistance" and rejects millions of people trying to keep a roof over their heads?

Anyone else tired of this colossal bait and switch scheme yet?

[talkpeople]

To all you renter out there who say let them lose their homes. Hey guess what when the person who owns where you live loses their home I guess then you'll finally be affected. Until then you can go around and judge others and stand on your pulpit.

[Y3rMawm]

I can move to another rental far faster than you will be foreclosed upon.

[Egalitare]

You're assuming there will always be sufficient landlords who you can run to. The Commercial property foreclosure phase is just beginning, which will include many apartment buildings and entities which own mulitple separate dwellings for rent.

[jrmarsh]

Guess what, you might be paying rent and get evicted because the house you are paying rent on goes into foreclosure.

Besides, it's not like there isn't a glut of homes on the market, go buy one big mouth, maybe you can be one of us!

[zitlight73]

Well of course they don't qualify silly, they're not bankers. You see Obama like all other Demopulicans would like to help out the jobless working class and the poor really they would,sort of but there's just no money in it.

[thenorthshore]

"She had heard President Obama promise that help was on the way for homeowners like her..."

sorry she 'believed' barrys 'promises'

he's made so many and keeps soooo few

'barrys snake-oil motors' aka gm will be paying com.mies to mfg. autos in 2011

and have them imported to the US taking more US jobs. shhh: one of barrys secrets

jolly good show barry

keep up the good work

[rc42]

can someone explain to me how so many people with goo credit cant get loans.im being totatally serious.th­ere has to be more to these stories,maybe no job or underwate or trying to borrow to much .i know lenders have been overwhelmed by the amount of people trying to refi so its taking alot longer.ban­ks make money lending to people so its in their interest to lend to people w/good credit , a job and equity in the home.

[Austrian School]

Banks don't know how much of their investments are toxic. So, to make sure they survive, they cling to their money, even the bailout money, so they can use it for operating expenses and to cover their own losses.

The banks need to survive until the last of these bad loans reset or default. Then, once things settle, and the banks know they'll survive, lending will begin again. I mean that is their business, after all.

[SusanStoHelit]

I think there's more to the story - her, for instance - she says she bought the house for 77,000, has been paying for 12 years on it, took money out twice, about 30,000, and refinanced once. So - how did her loan get to 140,000? She says she has a condition where the doctor has recommended less stress, so she's choosing not to work - but it can't be anything where that is needed much, because otherwise she'd be going on disability.

Me - I've got good credit. And on one income for 3 people (me, hubby, baby), we had no problem getting a loan (credit union, USAA, Wells Fargo, Countrywide all approved us). Not only that - but we were able to get a loan to buy our house, even when we still hadn't sold our other house! I make a fairly good salary, but nothing ridiculously high.

So I sure don't know why people with good credit cannot get loans - but I suspect something more behind it.

[formerprosecutor]

My final commnets
All fiscally conservative people should be alarmed at every foreclosure. Poverty is the inevitable consequence. Which means our taxe dollars are going to have to prop them up; housing, food stamps other assistence, maybe for the rest of thier lives.
If they have children, unending; another family in the system with little motivation to better themselves.
They are not longer doers but takers. Oh NO you don't, we wantthem to take care of their own children!!! that is what you should be saying. Children in foster care cost THOUSANDS per child a month.
for those more fiscally liberal; they only way, for generations , that the working clas hav created wealth ios through ome onwership, though that coolleg educations for the next generations were secured. and a new middle class created. out of poverty through home ownership.

everyone is a stakeholder in this enourmous problem. I don't care what caused this , finger pointing and cause analysis is for some geek in HUD or the treasury. WE need to FIX this now. Before we have a modern GRapes Of Wrath and one of six families are living in NEW HUD project housing, paid for by the other 5 families.

[DebnJosh]

Well put.

[shamroc02]

Im sorry, but I dont feel sorry for some of these home owners who got houses they couldn't afford. Some people who were responsible are paying a price by having to bail some of these people out. If someone was respnsible and just so happened to get laid off, fine...but she is still saying that she doesn't want to work, so there-for, I dont care if she gets bailed out. The President said at the beggining of all this that this plan was not going to help everybody.

I hate to sound cold hearted, but im just tired of hearing Americans complain about government when the fact of the matter is had Americans not been so lazy and greedy, we could have stopped a lot of this as well.

[formerprosecutor]

If there had been the same regulations pre-1975 the loans would not have been arms; some people would have NOT got the loans, and the foreclosures would have had a process not found today

[Siebenstein]

Obama's rescue plan is a scam. I have supported him , but an uneasy feeling starts to creep up in me. I have learned from lawyers, that Obama's plan was already in place in California (other states?), long before he became president. He used existing law to make himself look good, doing nothing for homeowners in trouble. A weak-hearted approach, not answering a pressing issue at all, begging the question: "Does he want to help us?" Home prices are falling 40-50% in California, the banking industry's "shadow market" not calculated. Once they will push all their properties, they are holding back, onto the market, prices will even decline further. Thanks to Obama there is no help out there for people who are upside down like this. We need to ask; why is he helping the way he does, and whom does he try to benefit? If he had been serious about this issue, he would have never made the modification an optional one. The banks would have been held accountable for their manufactured disaster. They would have to adhere to mandatory modifications, not voluntary ones. Obama's incentive to the banks was really a partial bailout, since they do less for homeowners after they have received this money, leaving Obama out there as a knowledgeable enabler . We should ask why he is so quick to push GM into bankruptcy , but let the banking industry freely play around as they wish. Is he bought?

[shamroc02]

Obama said that this plan was not going to help everyone. HE SAID THIS. While I think they need to step their ame up with these economy "plans", some people seem to have selected hearing. Everyone that is thinking they are going to get a free hand is not. Had some Americans not been so greedy and/or lazy they wouldn't be in this position. Cold, but true.

[DebnJosh]

I agree Siebenstein.

[Furby]

There's something wrong with the math here. She bought in 1997 for $77,500. She refinanced in 2007 to borrow $20K on her equity for roof repairs so she should owe about $70K having paid down some of the capital over 10 years. Yet the article says she now owes $144K on her property that is valued at $122K. Her payments have increased from $600 to $1K between 1997 and 2009, a period when interest rates dropped considerably. I look at all this and I see a big gaping hole in the facts. Unless I've misread something, she has been dipping into her equity more than once. This scenario might also suggest overspending.

[Tkevan]

You missed the refi for the car and the refi for the credit cards.

[Furby]

And there we have our answer. The woman should probably deal with her inability to budget.

[SusanStoHelit]

The car wasn't that expensive, so we must be talking about something like 50K on credit cards.

The article mentions a refi would give her a higher interest rate - that means her 30 year fixed that she's on right now does NOT have a bad interest rate, rather a very good one.

[Lorianne]

There are always big gaping holes in these stories the MSM publishes.

Every Single One

They have no respect for the intelligence of their readers and think they can get away with it.
That is why newspapers are going bankrupt.

[Austrian School]

I don't know if it's that. I think many reporters just aren't very smart. They're 'actors' who are trying to look like reporters.

[justanotherday]

Also take into account tax increases.­.... But all the refi's are what no one seams to talk about. There was also some woman on 60 min who she said she refinanced 3 times and took 20k with each one, and now can't pay her mortgage. I'm all about trying to help people to a point, but you also need to take responsibility for your actions.

[SusanStoHelit]

People in the worst circumstances are definitely the ones who should be helped first! She isn't one of them.

She's been laid off, and is electing not to get another job - yeah, stress related illness - were it anything real, she could go on disability - apparently it's nothing that severe. Go get another job - anything, and pay that mortgage - it's a fairly small one still, shouldn't be that hard to pay.

I support refinancing of mortgages for the people who got trapped into a stupid exotic mortgage when they can afford a standard one, for people who got into a high rate, and can afford to keep their houses at a lower rate - but she's apparently got such a low rate that a new loan would be at a higher rate. She's not the people this was designed to help.

She bought an inexpensive house, then decided to use it to fund other purchases, adding a ton of money to the morgage - more than the story says I think - how does a dozen years of paying on a loan for a 77 thousand dollar house, with a supposed mere 30 thousand taken out in equity result in a total due of 140 thousand? It doesn't. A dozen years of paying it off the story says (more I think), she should have something around 20% of the original paid off at least. Numbers are not adding up.

[cadawa]

I was really glad Obama won the election now I can't figure out if Obama is incompetent , naive or corrupt.
What plain to see he is dancing to the same tune that Bush/Cheney did.
Money for war and military contractors but no money for working Americans. Billions for failed CEOs and nothing for the their victims. Instead of transparency, it's secrecy and spin.
These policies didn't work for Bush and they won't work for Obama. The tragic thing is that innocent people will pay the price for his failures.

[shamroc02]

If you are saying all this, then you never supported Obama...pl­ease stop.

[Austrian School]

Lets keep those foreclosures coming, baby! I can almost afford to buy a house! So, so close....

[JaneQCitizen]

Don't DO IT!!!!! Unemployment is still goin' up. You may be next!

[Austrian School]

Good point. I'll wait for the bottom, then i can sell WHEN i get laid off.

[GypsyRose]

My guess is, you're being somewhat facetious, but you know what? It's even "closer" than you think. So, go for it, join the club!

[Patrick McCabe]

This is the proverbial donut hole routine. The tragedy of this banking oversight again is a lack of transparency by the federal regulators. The idea that the perpetrators that put homeowners in this depressive state are now denying that they are responsibl­e...by their sheer lack of modifications for their good customers.

These actions demonstrate that the banks can do no wrong while tax payers cannot even get a writeoff for their homes value decline caused by the paper chicanery of bankers shell games.

However, Wall Street can writeoff its losses when stocks plummet. I do not see any help at all for our citizens from the White House...wi­th our home value loses.

Can we draw straws?

[SusanStoHelit]

Good customer? She's paid the bills - but she's also run a loan on a 77 thousand dollar house to almost double - even after 12 years of payments. She's chosen not to get a new job to avoid stress (for me, the stress of not being able to pay my bills would be worse) - but whatever her doctor has said, she doesn't qualify for disability - so she's just choosing not to work.

Banks do need to help the customers who have missed payments, who are in IMMEDIATE danger of foreclosure first. It's obvious.

[formerprosecutor]

I thought the article said she was attempting a government sponsored modification? that is not a refi.

She will never get a true refi; she is umemployed.

[MNTom]

Th eprobelm with me is that I triied to refinance, but with my good credit of 787, I was turned away.

[Lorianne]

It's not a good idea to suck all the equity out of your home.
Particularly if it's bubble equity.