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

[chicago25624]

How dare they ask for money down? After all it was no money down and bad credit that got us into this mess

[AmandaSabater]

The home owner mortage assistant plan and the credit card bill, were so disappointing. I know three different people that didnt qualify and now are going to lose their homes.....­..........­it bothers me that the goverment worried so much about the banks going on bankruptcy but they didnt care about the american people. Obama said "people bought homes they couldn't afford", but that is not true at lease not in every case.....M­any of my friends lost their job due to financial crisis, some of them are getting salary reduction.­..........­..........­..........­.It is regrettable that many people are in danger of loosing their homes..... not the house of their dreams, but the roof over their heads.

[M1]

I know about 4 persons moving towards foreclosure in about 6 months. One is an elderly women of 87 who wanted to refinance to consolidate her credit card bill and they put her in an adjustable loan she could not afford from day one. Her original loan was a hud at 6% fixed interest. Now, she has an adjustable loan she can not afford but, oh wait, it gets better....­they give her the option to pay the amount she can actually afford (it is called pick a pay). The problem is that it serves to increase her principal and they readjust her loan amount as it naturally increases beyond what she can not afford. She is on social security and headed towards foreclosure. The loan agent had to know she would end up there.

This elderly women still does not understand what happened to her fully. Now, she has been handed a 1-800 number to Wells Fargo loan modification department but they are telling her they can not help her either. She says the banks used to be trustworthy and the loans she had secured in her lifetime where never this complicated or harmful to the consumer.

[Lorianne]

We should not try to sustain the unsustainable.
We should not try to reinflate bubble prices.

[charitabledonation]

This was Reagans doing and Obama's to clean up.

RENT LIKE THE REST OF US. THANK YOU. GOOD DAY!

[Austrian School]

There you go folks. It's just that simple. Hahahaha!

[JaneQCitizen]

Wonder what would happen to the banks if every single one of us underwater in our houses just walked away.

Seems that's what the banks want, hmmmm? After all, we can't sell, and can't re-fi. Take it. See how that works out for them.

[formerprosecutor]

5 families on the dge now
1 of 8 that are now jobless are at the brink of foreclosure

during the great depression 1of 6 were homeless

we are heading there fast

[formerprosecutor]

That should have been 5 million families on the edge now

[fifty8]

The truth is that the Great Depression reflected not the failure of America’s free-enterprise system but rather the failure of the system that replaced America’s free-enterprise system. And contrary to popular belief, Franklin Roosevelt’s New Deal programs didn’t save free enterprise; they instead fully and completely rejected and abandoned the free-enterprise system that America had embraced since our nation’s founding and replaced it with a system in which the federal government’s primary purpose became to confiscate and redistribute wealth and control and regulate economic activity.

http://www.marketoracle.co.uk/Article11057.html

[speedingpullet]

If it works for you as a business decision - then go for it.
Just make sure to have a rental in place before you go , in case your credit rating takes a hike.

[formerprosecutor]

A foreclosure on her credit report will prohibit her from renting; though she maybe able to find a private landlord with one or two unit rental outside of a city, that will "ignore" her credit report.

[valleygent]

I am always a bit taken back by the nature of the comments in regard to just regular folk that need help...som­e of the comments here are just revolting. Every American in financial trouble deserves some help, this woman didn't get fired... she lost her job... because of the greedy rats on Wall Street destroying the American economy. Shame on those who judge others harshly. And also shame on the new administration for formulating a mortgage modification plan that helps so very, very few middle class and poor Americans and favors banks. This portion of the economic recovery needs a complete redo...and fast or the bottom will just keep slipping further down. Listening Mr. President?

[formerprosecutor]

nor do they understand the impact on the economy . or society.

[Tkevan]

Try reading the article again. When my wife and I bought our home, we decided to purchase one that, if one of us lost our job, we could make the mortgage on one income. We didn't refi to purchase a new car (she did), we didn't refi to clear credit card debt(she did), we didn't use the value of the home as a personal piggybank to pull money out of when we wanted something. She did. Now I should help her keep her home, because she wanted things she couldn't afford on her budget??

That's exactly why we will be the new property of China before Pres. Obama gets out of office.

[valleygent]

Utter nonsense..­.above.

[weebils]

As a person who also bought a home within her means and did not refinance to buy a new car or go on vacation- I have to say I agree. We were always receiving calls or mail telling us all the money we could get from refinancing or an equity loan. It was tempting but we said no because deep down we knew it was too good to be true.

[cronkyvoddy]

The banks are not helping. No surprise there. We have learned over the last 6 months that Wall Street and the Banks control the country, the hell with everyone else.

Uncontrolled capitalism still looking good to everyone? Unfortunately no way to fix it short of revolution.

Adios, we are moving to a small town in a small country. Ya'll can have this mess.

[Austrian School]

Where do you see uncontrolled capitalism? We haven't had that in 80 years.

Not that i advocate uncontroleld capitalism. But we should acknowledge reality.

[JaneQCitizen]

Oh please. Wall Street went nearly 100% unregulated for the past 8 years or more. What was regulated had no one from the Fed watching.

Wall Street bludgeoned capitalism to its grave. Any wonder why beaten down citizens long for a bit of socialism in the US?

[fifty8]

Don't worry,its out of your hands.Forc­es outside of the country will the fix the problem.

[JuliaS123]

I don't think this woman should qualify for assistance. She bought her home for $77K but now she owes almost twice that? That's not a result of the real estate crash. Her house is still worth more than she paid for it. This woman used her house as a credit card. She borrowed money to purchase other things and she should be expected to pay back that money. And every homeowner should have enough money in a rainy day fund to handle a period of unemployment. That is just part of being financially responsible. If you can't afford to save a little for a rainy day, then you can't afford the house.

[formerprosecutor]

Sure are a lot of wannabe judges on here today.

I too have clients that are facing foreclosure with more poignant stories than the example. However , I think that was selected because it was an AVERAGE situation.

I have not found that having life threatening medical issues or straight up job loss (or both) softened the hearts of the lenders whatsoever.

So you people can save all you analysis of what caused the problem because the lenders DO NOT factor that in to their decisions. In fact I have NEVER had a lender ASK us WHY my clienst were in trouble; though I have sure volunteered that information .

They want their money, they want it on time, and they don't care why they haven' t got it.

[EBE]

With all due respect I feel that you are lumping "all banks" into one category as some might do with attorneys.

As a small community banker, I do what I can to help customers if they have a legitimate hardship such as medical problems, divorce, loss of work, etc.

We service our oloans that we sell to Freddie Mac and I have one loan in our whole portfolio currently that would qualify for the modification program--not because of the hurdles to qualify for the modifications but from conservative underwriting at the time the loan originated which is something that places like Countrywide didn't do.

[formerprosecutor]

I apologize. I did mean "THE banks"; the major banking interests. I am quite aware that local community banks undertsand the impact that foreclosures have on a community, even the wealthy of that community.

I have nothing but good experiences with local banks in my career, even when things did not go my clienst "way" there was open communication and honest dialougue.

IF THE banks, had the stakholding interest in the communities that your banks do, this would allhave happened differently.

[GypsyRose]

Good for you, and thanks. (You're correct about the "lumping")

[Austrian School]

Am i supposed to feel sympathy for this lady? After she did this?

"Like tens of millions of other American homeowners, she added to her mortgage balance as the value of her condo swelled, at one point exceeding $200,000. She refinanced to pay off some credit cards and settle into a 30-year, fixed-rate loan. Later, she took out a home equity line of credit to buy a new Hyundai. She refinanced again in 2007, borrowing $20,000, mostly for a new roof."

Sorry, we can't help people who make stupid decisions with their money.

[MaidinMossyCreek]

Like the banks?

[Austrian School]

Yes, everyone. Banks don't deserve bailouts anymore than the American public does. You can't reward stupid and expect to flourish.

[Austrian School]

Who wiped that other response to my post? I may not agree with it, but why delete it? That person has a right to their opinion as much as i do. i could've done without the personal attacks, but i'm a big boy. I'd rather have free speech here and let people judge who is right for themselves.

[formerprosecutor]

you don't have a right to "free speech" here; this is privately owned "paper"; I am censoed regularly, comes with the use of their property
and wtahc your key words; i am surprised st. u. pid got through that post
that is why i mispell (sometimes it is because I can't see all my post at once)

[ShawnHanks]

This is why all these people voted for Obama and this is the thanks they get?

[ohiomark]

It's the "gimme gimme" syndrome.

[formerprosecutor]

oh no
tee rrrhhh ooo eelll eeel alerts

[Lorianne]

Bingo!

[learntofly]

You're making a general statement about masses of Obama voters from this particular person's bad financial planning? She rolled major debt into her Countrywide/BOA loan TWICE. And if anybody would rip off a misinformed customer, you can bet it would be Countrywide and BOA.

[GlenRast]

If that's why they voted for him then they're just as stupid as they were when they got mortgages they couldn't pay off.

[Austrian School]

Wow. This is a total shocker.

So they're telling us that we can't depend on the government to save us? Oh man.....wh­at will we ever do now!?

[mizplacement]

Oh, go be a grownup. If anyone expected Obama to sweep in and solve everyone's problems for them, they either weren't paying attention, didn't want to pay attention, or just wanted to see him fail and want no personal responsibility. Not saying I agree with everything Obama has done, but I think he is at least making a good faith effort. He's NOT the Messiah; never said he was.

[Austrian School]

Okay. I'm glad you feel that way. But ever said anything about Obama?

I'm talking about Government in general. They always fail you. So do it on your own.

[Countdown09]

My understanding of this program was to try and help people who were caught in shady sub prime or adjustable mortgages. It was not put in place to help people like this women (who by her own admission) used her house as a ATM machine. She took money out of her house to buy a car (a depreciating asset AND to pay off credit cards which I would bet were used to buy other depreciating assets like clothes etc. So in a nut shell she chose to invest her savings (home equity) into things that would not appreciate in value. Finance 101 says never invest cash into depreciating assets.

And her story of owning a home and unfortunately losing her job is a reality of life, this could happen to anyone, the government can't save every person in her situation.

[Jacqueline3]

This is so true. In cases like these, they need to lose their homes.

[formerprosecutor]

silly girl
we need more homeless; more people dependent on public housing and our tax dollar to the end of their lives
try looking forward even a year and see what you see

[dramamama1]

I have to agree with your assessment. Her situation is heartbreaking, but lacks personnal responsibility. Two refinances and a home equity loan lead to a shakey financial situation. Blaming the government is disingenuous at best. Maybe some bail-out money would be better used in educating everyone in personnal finance 101.

[AlanBJ]

This woman's lifestyle was bound to catch up with her, sooner or later. We make choices everyday. and unfortunately, her choice was to leverage her home to borrow money for material gain. I could probably understand if she did this to support an ailing parent, but living beyond one's means will not garner much sympathy other than from those who do the same thing.

We----------who have been living off credit, borrowing money well beyond what we could pay back, not thinking about the future, not thinking about the possibility of what may happen to us if we had an accident and become disabled, lost a spouse, divorced, or suffered any other major setback, how would we survive---­----------­contribute­d just as much to this flailing economy as the banks with their credit default swaps. Our keeping-up­-with-the-­Jones unpaid credit card debt is part of those credit default swaps that we are bailing out.

Our own greed, our own selfishness, our own inability to say no to that extra credit card that we will use, not for emergency purposes, but for something that we really cannot afford, helped to bring down this country, along with the greedy banks.

[FairCitizen]

Totally agree with your statement. She was irresponsible and now says she can't qualify. Greed gets you nowhere and the MSM should have found others who are not as greedy as this woman.

[Jacqueline3]

She better start looking for an apartment!

[Lorianne]

Well stated.

We're not picking on this woman. She is merely an example of what probably millions of people have done over the past 10-15 years ... at all levels of income ... and that was the problem. The sheer numbers of people acting as she did was simply not sustainable.

[Mike949]

The woman gambled on the valuation of her house and lost. What is the difference between what she did and the millions of others who invested their retirement savings and saw the Market collapse. I lost 35% of my retirement in one year in spite of having investments diversified and low risk. Should I have those funds restored by the government? Absolutely not,

This woman is struggling now but still making her payments. Even though she has found a way to this she will likely stop so she will become eligible for government support. I actually heard a discussion on the Tom Hartman show where that course of action was recommended.

The system we have now is set up to support people who have made bad decisions This support comes from those who have not overspent their incomes. These are people who actually did not purchase things they could not afford.

What do we tell these people who did the right things?

[formerprosecutor]

What do we tell people that did the right thing and lost their jobs?

That makes no difference to the lender.

[Countdown09]

You tell them life sometimes doesn't always go to plan. People owning homes and losing there jobs is nothing new in this country, what's different is there was a time people planned and saved in anticipation that it might very well happen to them. AND those were the days when people didn't use their homes as cash machines.

[ceindependence]

So what are you saying? If someone loses their job, the governmnet should make the payments for them? Should the lender say, "Thats ok, not to worry!" Who is responsible? You seem to have a firm opinion. So, what is your answer?

[drkazmd65]

I know what you mean Mike,... my old 401k-equivilent from my State job (left it in 2004) that I wasn't adding any money to 2004-2008 dropped over 45% between December 2007 and December 2008. My durrent job's retirement account only didn't decrease because I (& my employer) put in 10% of my salary during that time to hold even over the course of the year. I'm not asking the Government to cover my losses on these accounts.

In any investment - there is risk. It would be nice if we allowed the big banks to experience the effects of that 'risk' as well,...Bu­t,...

The smartest thing my wife & I ever did post-marriage was chose NOT to tap the equity in our old home before we moved & sold it in 2004. We were tempted to - but after weighing the pros & cons - decided against it.

[Lorianne]

Well said.

The people who were cautious and did not suck all the (bubble) equity out of their homes, to live a lifestyle they could not otherwise afford, are the ones who will unjustly end up paying for this mess.

[MaidinMossyCreek]

If you have lost your job, or experienced a cut in income, or your property value has dropped below the amount of your mortgage, then you are out of luck.

In other words, this mortgage plan helps anyone but those most in need.

Barack is every bit as good as Billy Mays. :)