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

[formerprosecutor]

How do you people expect the average , everyday working person to foretell that the economy would tank , thanks to the banks and wall street. GM would close, millions of jobs lost directly and indirectly, the real esate market would collapse. And even State Universities would cut low income secretary jobs??
Who knew?? Not Congress, not the WH. (or so they say)
But every working person, taking home 2k a month was supposed to have saved up enough to get by ...until.. what?
I know the people whose kids are MD's and have family money, and doctorate educations and have been employed for 300k a year for may years don't "get it". And it isn't important that you really do understand the working class, but if you are not going to help, there is no need to prvent others from helping.

[sueinmn]

Many wallstreeters today are waiting tables and finding out how rosy it is. Too bad many here couldnt get a taste of reality. Their throne may tumble one day and learn compassion. The Toyota republicans are in full force.

[loki]

Obama is not keeping his promises. Sure , he is getting things done, but they have changed so much from the original promises that its hard to tell if its Obama, or Bush in the white house some times.
How can things change, the bastards that wrote all the bad loans and scammed people out of billions are not only still operating in full force, but many are sitting as CEO's and upper management in the biggest banks. From the smallest Loan officer who scammed us, forging papers and signature, lying about terms and contractual agreements, they are still all on the streets, and all working in the mortgage lending business. Nothing has changed except millions of middle class and poor, got screwed. Oh wait, that hasnt changed either, that still happens.

[sullivanryan]

The bottom line is that these people have not missed payments yet. Think about it: if you have not defaulted, how are the banks, the credit card companies, etc. supposed to know that you don't have the money if it isn't showing on the balance sheet? Maybe some people would take advantage of this program to get a deal, refinance, etc. when other people may need the financial assistance more urgently.

I'm not saying the people in this article are not hurting. They've lost their jobs and they're struggling, like a lot of us. But it makes sense to attend to the most extreme cases first. And, as much as people want Obama to be Superman, the government can't fix this mess all at once.

If I were at the doctor with a cold, and someone came in with pneumonia, I would hope the other person got treated first. (Regardless of whether or not they had insurance.)

[sueinmn]

You can be current while on unemployment. It is a temporary situation. Why shouldnt we be allowed to simply prove the changes that happened with loss of a job. Why should we not be able to correct things BEFORE your credit is in the crapper. Its like the banks want to ruin you so later they can justify higher rates as then you are a risk!

[formerprosecutor]

yeah, except they are NOT modifying the loans; look at the numbers and the vague language to those inquireys

you do realize that if she waits until she is in default she will have 30 days to get out.
and if she can't pay next month, it will 31 days untilthey begin foreclosing
so she may have 61 days total to find a another place to live. with no money

car ? shopping cart?

The first thing every lenders website tells you is to conatct them if you are in trouble; a premptive strike, yet they brushed her off. so now what?

[notAMoron]

She did finance that Hyundai with her house. If she had taken out a car loan to buy a car instead, she could let the repo man take her Hyundai and she would have another 15-20K equity in her house. She would then qualify for the offers her bank is putting on the table without any money down.

[Grannysue]

I applied for this, qualified for it, it was very fast and streamlined, however, it would only save me $28.00 a month, so now I'm trying to go a different route. But I don't think there's anything wrong with the plan, it just depends on your situation.

[sueinmn]

Their is something terribly wrong! Saving you only 28,00 monthly while the banks reaped thousands is terribly wrong! Any way you look at it!

[AnnfromCA]

Interest rates are going up. That's the problem. My friend has a FHA loan. She's financially OK, but she's one who has lost a lot of retirement equity due to the crash. She could sure use a lower house payment to offset those losses.

The process is ridiculous. The on-line form won't even allow her to delete her employer. She took an early retirement package. Then, you have to send an e-mail to complain if the form doesn't work. Wanna guess how that method works?

Frankly, this is a program where there was absolutely no infrastructure in place to implement.

That's why I continue to say: It was an announcement.

Shame on this Dem administration. They know the difference.

[formerprosecutor]

Do you know how much tax money the lender was given to modify your loan?

[sueinmn]

Nor do we know how much they modified the paperwork to get the government money! I bet that would be an eye opener to all.

[fcsakes]

I don't understand it either. My take on this is that she refinanced over and over to pay off credit card debt, buy a new car, and I can't remember the other reason. Then she didn't want to work because of a "stress-related illness." What would that be that's different than millions of people who are working?

I thought the mortgage help was supposed to be for homes that were in foreclosure because of the under-handed tactics of loan companies, not because the homeowner had run themselves into unnecessary debt.

It appears that some people are trying to take advantage of the homeowners assistance program to pay off debt they never should have incurred in the first place. I'm not sure I want my tax dollars used for such a situation, particularly since I have never been able to afford a house myself, don't use credit cards, drive an 11-year-old car and I made more money than this lady - she should have known she couldn't carry so much debt on her salary.

[sueinmn]

So after the next few years when this crisis is over, many have lost their homes and their credit. What will become of all the job hunters when YES your credit must be good to get a job! Does than mean only a certain class of people will be able to get good jobs? This is creating an open ended can of worms to come. It is much better to keep people viable and in their homes as to what will be the long term effects to come. As former prosecuter states, the long term will be costing us all more to support these families in one way or another! Put them into the system and we all pay more. Is this the answer? The concervative way is simply throw them to the streets. This is not what America was made of. This country was made from the sweat of all of us and determination to better ourselves, our communities. We have changed and not for the better!

[vietveter]

The article is correct about the fact that these programs do nothing for older people that have worked and kept their credit in good shape.

My home cost less than 2x my income. I was making extra principal payments. Then my well paying job was outsourced. Bam!

I am doing all that I can to keep up. Savings [obviously not enough] were history before I could file for social security this year. I have been [at best] part time at work and making ends meet is a bitch.

There is no help for those that have been responsible and not accumulated debt on credit cards or additional mortgages.

I may make and then again I may not. Whichever way that it goes I seem to be without help from the bailed out bank that holds my house in hock.

I think that this woman was a bad example of a real problem.

[AnnfromCA]

I think she was a good example.

[Mnemanth]

What? Legislation worded and ruled in such as manner as to be self-gutting?
What? Legislation "intended" to help the People...that does nothing for the People?
What? "Change"?
Whatever.

[kewe]

What? Someone on a blog who can't find the linkee thingee and read the entire article?
What? Someone who can't comprehend that home-ownership is not a right of the people that the government should protect and that this legislation shouldn't and didn't?
What? shocker?

[DofG]

"Man cannot live by bread alone!"

One of the most profound truths of our social order is the power in our numbers. The plutocracy, as well as "their government representation", benefit from the vast production that labor, and collective consumption, yields from those numbers. But there is also an underlining emnity for those numbers also; and this is expressed in the present emnity that the orligarchy has for unions to the extent that even many ordinary citizens have "convinced themselves" that unions are "bad" for America. And how can this be? This is happening because we have been conditioned to pledge allegiance to our government (The "United" States of America) but not to each other. To do the latter, in the little minds of the "powerfully" greedy, would pose a threat to the status quo. Thus, our weakness as a collective comes from our "unconscious obsession" with all things of "individual expression", at the expense of our more powerful universality.

So obviously, the key to how we shape our lives inspite of these social imbalances, comes down to what we collectively consume. The question is whether our personal purpose is to "live", or to merely exist in the splendor of survival? This is the choice that will ultimately transform our present misguided atititudes concerning human capital.

[sueinmn]

TAX DEDUCTABLE! use equity in your home and its tax deductible. Wasnt that the government plan a few years ago? Change the deduction rules and society changes with it. OH NO, now we blame the people and say they are irresponsible! This is the new AMERICA! UFB! (unf--kin believable) if this is what it takers to be a republican, now I understand why i am not! You people are as ruthless as the banksters. Any of you know your neighbors? Are you part of a community or are you simply above everyone else and or simply so cold these days, no one matters but yourself!

[formerprosecutor]

yeah well, someday they will find out

"do not ask for whom the bell tolls, for it tolls for thee"

[talkpeople]

I say everyone should pull their money from banks then lets see what banks will do

[vietveter]

They would get more of MY tax money as bailout bucks

[talkpeople]

dang your prob right. tired of feeling helpless. All I can do is let my voice be heard, keep people talking and hopefully vote against those who are against us.

[Lilly06]

COULD PEOPLE PLEASE READ THE ARTICLE. Most of these comments come from knowledge about the current homeowners crisis but there is obviously none about the article.

If you did then you would realise the the subject of this article is having the financial problems she is ihaving as a direct result of her financial irresponsibility.

1. If you have more than $5000 credit card debts or own more than 3 credit cards, your financial woes are your responsiblity and your fault.
2. If your mortgage debt is more than 4 times your income, your financial woes are your responsibility.

Just like the banks were reckless, there is noone to blame but yourself for your own reckless, that is why I say the woman in this article deserves no pity.

[notAMoron]

If you owe twice the purchase price of your house after living in it for 12 years, your financial woes are your responsibility and your fault.

[formerprosecutor]

No what would be bad is that you twice what it is worth today

[formerprosecutor]

Equity has ALWAYS been treated like moeny in the bank; one reason people invest in real estate.

It is hard to do without when you have a 100k sitting in the bank; but the some people with lots of resources will never get that.

[EuLupu]

Right, she doesn't deserve no pity while the banks that sold her the "ever ever growing value of your house and take cash out of your house" DO! Refinancing WAS a way for LOTS of people to make end meets,keep a child in college, by a new roof, or paying off high credit card balances with the hope that they will be debt free one day. All this based on a BIG,FAT LIE - artificial increase of your house value. Was she SO irresponsible considering on what she used her money for?? Isn't she part of CURRENT homeowners crisis?? Sure, she is, she is a responsible homeowner trying to stay in her house and hoping that all that huge billions of $ banks got will favor her too. The person didn't miss one payment in how many years?? But the banks are helping the ones that do, and have mortgages in millions, not small people like her. My advice to her is to NOT pay and hit for foreclosure, she will have better chances to renegotiate her mortgage.

[EBE]

I had sympathy for this woman until I read that she paid $77,500 for this place over twelve years ago then borrowed and borrowed and borrowed some more up to where she owed over $200K on her home!! Also, she borrowed money to buy a car with a HELOC?!?!? If like most HELOC's she borrowed money for 10 years on a car that she probably isn't going to own that long and depreciates by the day. It looks to me like they could have picked a better example for their story rather than the same old "living well beyond your means" which unfortunately is the culture here in the U.S..

The mortgage modifications are for loans that are only backed by Freddie and Fannie.

[notAMoron]

I don't think I have seen a good example of someone who got into trouble by taking a traditional loan with 20% down and never refinancing to cash out extra money or taking a HELOC.

Show me someone who bought a house 3, 4, 5, or 10 years ago with 20% down and still has the same fixed rate loan and is underwater now. The NYT can't because that person doesn't exist.

I think we can all agree that banks shouldn't have been so loose with 0-10% down borrowers, but that doesn't make the case that we should now let people refinance a loan for an underwater house without the homeowner paying down the principle to 80% of the homes value.

[formerprosecutor]

People need to keep the "top thought" in their thinking on this subject.
This isn't about who is "worthy and who isn't"

The PUBLIC, our society, has a huge , critical interest to keep people in thier homes.

Let's just imagine , if the 5 million familes (not just individuals) that are currently thought to be at risk of foreclosure, lose their homes, where will they go?
Apartmenst? are there enough affordable aprtments? can you get an aprtement with bad credit?
if you have money for fist and last and deposits, couldn't you catch up your mortgage? can you get an apartment without being employed?
Do we have enough foster care families for the children that will go into foster care? How will we pay $700 to $900 a month per child to foster familes for their care?
How will we reunite families? How will this affect the nature of our society? Will poeple turn to crime?
Who will buy all those houses? What about the tax bases? Will the bank [pay the county and state property taxes on these houses as they sit empty? If not, how will the counties survive?
Who will buy the goods that are on the market?
Will the abscence of 5 million families in themarketplace impact more jobs?
How many ripples can YOU count each time the rock of foreclosure is thrown into ouir economic pond?

[Diana]

What you say makes perfect sense and is a rational conclusion to draw from the situation. Which is all the more reason to believe that this country is owned--lock, stock, and barrel--by the corporations.

Industries like banking and pharma couldn't care less about the fate of the middle and working classes. Everything they do, everything they support, is for their own profit and almost always at the expense of the rest of us.

This truly is class warfare.

[formerprosecutor]

I totally agree

when a credit report , from private, lender owned companies, is relied on by the federal and state government to deny people jobs, then we ARE truly at the mercy of the banking industry

[notAMoron]

"Rather, the bank tried to sell her a new loan with a slightly lower monthly payment while asking her to pay $13,000 toward the principal and a fresh $5,000 in fees."
[...]
"Far from being one of those who used easy-money loans to speculate on homes proliferating across the desert soil of greater Phoenix, she has lived in the same modest, stucco-sided condo in suburban Mesa for a dozen years. She bought the two-bedroom home in 1997 for $77,500."
[...]
"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."
[...]
"Over the years, her monthly payment swelled from about $600 to more than $1,000."

So she used her home as an ATM.

A $600 payment would be a 15 year loan for $62000 (80% of purchase price) at 8% taken out in 1997. If she had stuck with that loan the principal on her house today would be $13,000.

Personal responsibility.

[formerprosecutor]

If I still had my cars from the 50s and 60's I would be well off.

If I hadn't worked for the government and been in private practice I would be wealthy

IF IF iF

HINDSIGHT is always 20/20