Obama’s new re-fi plan a gamechanger?

posted at 9:15 am on January 25, 2012 by Ed Morrissey

Jim Pethokoukis thinks it might be, but I’m not so sure.  As described by Barack Obama, the program is a significant expansion of a couple of programs that so far had been limited to Fannie/Freddie-backed mortgages.  CNBC explains that the new initiative will now promote refinancing for mortgages no matter if backed by one of the two troubled GSEs or not, but with “precious few details” on hand, much of the program remains unclear:

After several largely ineffective programs to help troubled borrowers and after fruitless attempts at budging the hard-line conservator of Fannie Mae and Freddie Mac, President Obama is proposing a brand new refinance program for borrowers who are current on their mortgages, regardless of who owns their loan; the catch is that this one has to go through Congress.

“I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks,” the President announced in his State of the Union address.

Unlike previous efforts in the refinance space, including a recently revamped and expanded government program for borrowers who owe more on their mortgages than their homes are currently worth, this plan would not be limited to those with loans backed by Fannie Mae and Freddie Mac, according to senior administration officials. The two mortgage giants own or guarantee about half of the nation’s mortgages. It would be open to all borrowers current on their loans.

The Obama administration is offering precious few details, promising more in the coming weeks, but several sources say the plan is to ask Congress to allow the government mortgage insurer, the Federal Housing Administration (FHA), to back refinances of underwater mortgages. No estimates were given as to how many borrowers such a plan could potentially help, only that this would be a voluntary, borrower-initiated plan, and not a blanket refinance of all borrowers.

There are a lot of holes in this plan, not the least of which is why homeowners who are current on payments more than three years after the collapse need government assistance.  They may be underwater on their mortgages, but if they are making their payments, then they are at no risk as long as they don’t need to sell.  Their monthly payments gradually will eliminate the negative equity in their asset.  Refinancing will speed that up slightly by lowering interest rates, but if these houses were bought during the bubble, the current interest rate is probably low from a historical perspective anyway.  And to fix the negative equity, those homeowners would have to forego saving the $3000 a year to plow it back into the principal anyway.

Pethokoukis calls this a “housing policy bombshell,” but then summarizes AEI’s Ed Pinto to explain why it will be a dud:

But surely questions will be raised if the FHA is the vehicle. As AEI’s Ed Pinto explains,  the FHA’s  capital position using private-industry standards shows the FHA to be deeply insolvent. The FHA is estimated to have a current net worth of –$17 billion and an estimated capital shortfall of $35–53 billion. Private regulators would shut it down rather than continuing to allow it to “grow” its way out of its insolvency. Republicans will have lots of questions and may balk if this smells like a moral hazard-inducing housing bailout. (It is just this sort of thing that launched the Tea Party movement, after all.)  Then there’s the bank tax to deal with. This SOTU shocker may well be the talk of the markets today.

Pethokoukis also relies on estimates that indicate up to 10 million homeowners will take the opportunity to refinance through this program, and an average savings of $3000 per year would pump $30 billion more into the economy each year.  However, if the problem is negative equity, then that money will go to paying down mortgage debt, not to increased consumer spending, which would render it impactless in the short or even medium term — and that’s assuming that the 10 million number is valid.  We saw plenty of numbers like this in the proposals already put in place by the Obama administration to deal with housing issues, and the actual number of people who qualified for and received assistance fell far, far short of estimates.  In fact, if the program operated as Pethokoukis assumes in generating spending cash for homeowners who are already under water, then it’s not that different from what helped drive the housing bubble in the first place: the use of home equity as an ATM for irrational consumer spending.

Being underwater on a mortgage is a tough economic position, but no tougher than people who invest in other assets and end up having less value than what they invested.  If homeowners find themselves in this position, they can keep paying the mortgage and eventually get above water on equity while continuing to live in their homes, which isn’t ideal but certainly isn’t an emergency that warrants picking the pockets of other taxpayers.  It also won’t do anything to prevent or minimize foreclosures, which is one of the actual problems in the housing market.  This is nothing more than a bald attempt to buy a few votes at the expense of taxpayers and banks, and it will exacerbate the very problems it purports to address.  Game-changer?  More like an overtime period.


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What would be a terrible game changer would be for him to take away the mortgage interest tax deduction. That will deflate housing prices immediately.

MayBee on January 25, 2012 at 10:53 AM

I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage

Note that the operatives here are “sending” and “the chance” because like HARP and all his other plans, that’s about as far as this plan will get. He doesn’t expect Congress to pass it and probably doesn’t really want them to. It’s all about the smoke ‘n’ mirrors and spreading the illusion that he’s actually helped or is intending to help citizens. As I heard someone comment about his SOTU speech–he just set himself for another year of doing nothing. Well, that is, except for campaigning for another 4 years to spend doing nothing, all courtesy of the US taxpayer.

stukinIL4now on January 25, 2012 at 10:55 AM

I’m surprised Ed doesn’t realize that private banks are not re-financing underwater loans, or properties without 20% equity. From that he draws the false conclusion that if negative equity is the problem people will put the $3000 back into the house. The problem is not being able to get a re-fi with less than 20% equity, if people could they would surely save or spend the money, not pay down the mortgage early. I’m not advocating Obama’s program, but this rebuttal is off-base. There is more issues like other comments said with liberty and forcing banks to submit to it, who is going to pay for it, and the consequences of that.

We were also ones that bought a house in 2005, put 20% down, got a fixed 5.75% rate, have never missed a payment, and can’t re-fi now because we are underwater due to the housing crash. I’m fine with that because we didn’t over extend and can make payments. We bought the house we wanted when we wanted and could afford it. It sucks we can’t re-fi because other irresponsible parties, on many sides of the equation, crashed the housing market, but it is what it is and I don’t expect Obama’s program is going to fix that.

rose-of-sharon on January 25, 2012 at 10:49 AM

Agree completely.

MayBee on January 25, 2012 at 10:55 AM

I know that Obama’s team previously wanted to enact a plan that would force lenders to write down mortgages to current market value of the property.

This would probably be very popular with a lot of people, although to me would seem to be an unconstitutional taking of property and would harm the market by reducing lenders’ assets significantly.

It’s a dumb, marxist idea, but just the kind of stupid marxist idea that sells well even as it does huge harm.

Why shouldn’t people be held responsible for way overpaying on properties? Property prices didn’t go up in a vacuum, they went up b/c people were crazily outbidding each other way over the market price of the property under the mistaken belief that real property never loses value and always increases in value. Everyone wanted to make a quick, easy buck by buying at the height of the market and holding for couple of years expecting the market to soar even higher.

the people in such under-water mortgage homes are not for the most part your normal working class people who were buying a house to live in long term. Those aren’t the type of homes effected by this.

I have very little sympathy for those in under-water homes. It’s the same thing as buying a $50,000 hummer when you make $35 ,000 a year, drive it off the lot and realize it is now only worth $35,000 but you still owe $50,000. You are responsible for those poor decisions, not the lender or the gov’t. And my earned income, in the form of taxes, should not be used to save you from yourself.

Monkeytoe on January 25, 2012 at 10:59 AM

I would not be telling the truth if I said this is not a great idea. After that being said, lets get to the crux of the matter. First and foremost each home owner agreed to a contract and even the President of the United States can’t circumvent this agreement, period. Another political ploy to pit one against another, very said times we live in.

DDay on January 25, 2012 at 11:00 AM

In 1990, I bought my first home in California, a condo (all I could afford). Within six months, the housing bubble there burst, and I lost almost half the value of the place. And I was paying about 10% interest to boot. But I needed someplace to live, so I kept paying the mortgage until I got married five years later. I rented the place out for another five years then sold it for what I paid for it. But I walked away from the deal with money in my pocket from equity that helped us purchase another home. Being underwater is not fun, but it is not the end of the world, either. No one forced me to buy the place or pay that interest. Luckily, I kept my job and was not forced to abandon the property as so many have had to today. This will turn around eventually.

415woman1 on January 25, 2012 at 11:01 AM

Isn’t being underwater on a house only an issue if you’re trying to sell it?

I’m sure it sucks to see your investment valued at less than you bought it for, but, that’s the nature of investments. My IRA is currently worth less than what I bought the stocks at too. I don’t see the President pushing a bail out for my retirement account.

JadeNYU on January 25, 2012 at 11:01 AM

My home is paid for and I’m not moving but underwater about $100k. I want my refund. Bwah.

BullShooterAsInElk on January 25, 2012 at 11:02 AM

This is nothing more than a new bailout plan for obozo to send up to congress who will reject it and then he will stand there and demonize the bad ol republicans for wanting to throw you out of your house.The initial estimates will be low but if it does pass it will end up costing tax payers billions and the FHA will collapse anyway.

jistincase on January 25, 2012 at 10:30 AM

.
Thats all it is- a freakin ploy. If the R house declines the fraud’s plan- they are heartless protectors of the 1%- IF THEY ACTUALLY PASSED this plan- they would be accused of running up debt and are hypocritcal when it comes to cutting spending to cut the deficit. Don’t forget how the 2003 Prescription Drug plan went. Dims LOVED it at the time- Bush blamed for it later.
.
Your standard lose-lose that SOMEONE has to call the fraud of President out on for playing with the legislature this way.

FlaMurph on January 25, 2012 at 11:03 AM

When I bought a house this summer, I got my loan through US Bank. About a month after we closed, I got a letter from Fannie Mae informing me that although they didn’t hold the loan, the were now managing it.

BigWyo on January 25, 2012 at 11:04 AM

rose-of-sharon on January 25, 2012 at 10:49 AM

If you have 20% into the house, according to your own comment you can refinance. You said banks will refi an underwater property with 20% equity. So, why can’t you refi?

And, if you put 20% down, how far underwater can you be?

I’m not asking to be a jerk, just curious. Where I live middle-class housing only took maybe a 5% value hit at most.

Monkeytoe on January 25, 2012 at 11:07 AM

the FHA’s capital position using private-industry standards shows the FHA to be deeply insolvent.

The FHA is insolvent using private industry standards of Mark to Market i.e. or fair value accounting refers to accounting for the fair value of an asset or liability based on the current market price of the asset or liability…But there is no reason to value the total asset portfolio, without asking what the investment might be worth when the mortgages are paid on time.

If someone is current on their mortgage at 5% interest, it would behoove someone to figure out how to value the current asset as a money maker, not the forclosure value today.

Not every asset is going into forclosure, and some are generating cash.

Now, the reason home owners can’t refi, is the same reason, the property must be appraised at current forclosure induced prices. I can get rid of that practice here and now, by saying, you can’t include forced sales and short sales in local average home prices. That doesn’t suit the forces that want to see home prices go down. Contented homeowners, however, are contented to hold thier home until the value is back, or not sell at all.

Fleuries on January 25, 2012 at 11:08 AM

Don’t forget about the mortgage tax coming…

Mortgage tax getting an 400% increase before implementation
NEWS Jan 19-2012

I’m reading several different articles on the new mortgage tax. Both articles have conflicting information, so I’ll cite the articles in the end of my comments and post links. For example, one source says the tax will go into affect by February 17th and the other other one says April 1st. I’ll have better information in the next few days. Also I need to revise my predictions on mortgage rates in the future for 2012, housing issues are changing very fast this winter.

A few weeks ago I reported from varying sources that the mortgage tax would add 10 basis points to a new mortgage if it’s guaranteed by Fannie Mae or Freddie Mac. Private mortgages will not have this new tax, only GSE sponsored loans. Now, it’s being reported that the fee (it’s really a tax) has a minimum of 10 basis points or .1% and the FHFA is looking to increase to the fee to 50 basis points. To put this tax in dollars, a 30-year fixed mortgage of $200,000 would pay $58 in taxes a month for the life of the loan.

more

Oil Can on January 25, 2012 at 11:13 AM

That’s what Obama wants, BigWyo: he wants his government to control all mortgages. Then he controls all people, too.

This is just a ploy to gain control of the people who avoided Fannie/Freddie in the first place.

PattyJ on January 25, 2012 at 11:13 AM

There are a lot of holes in this plan, not the least of which is why homeowners who are current on payments more than three years after the collapse need government assistance.

Government assistance? After us, the taxpayers, gave the banks people’s hard earned money assistance?

They may be underwater on their mortgages, but if they are making their payments, then they are at no risk as long as they don’t need to sell.

I’ve lost $60,000 in the value of my home. My interest rate is 5.25% and is a fixed 15 year mortgage. I can’t refi my mortgage (at the new historically low rates) because my home is not worth what I still owe and would not qualify because of the appraisal. Yes, we’re making our payments and have never been late, however, I would like to be able to use the money I could save because I don’t feel SAFE and SECURE with the direction our country is going.

Their monthly payments gradually will eliminate the negative equity in their asset. Refinancing will speed that up slightly by lowering interest rates, but if these houses were bought during the bubble, the current interest rate is probably low from a historical perspective anyway. And to fix the negative equity, those homeowners would have to forego saving the $3000 a year to plow it back into the principal anyway.

What on earth are you talking about? We will most likely never recoup the $60,000 in the value of our home. We have nine years left on our mortgage, so we’re not eliminating any negative equity anytime soon. Also, you’re assuming everyone bought during the housing bubble. A lot of people had 30 year fixed rate mortgages and are stuck. That’s the point you don’t understand.

I also hate your cavalier attitude towards money people would save. I remember hearing someone on Fox comment that it would be the people who are making their mortgage payments and seeing their home values decline who would end up being screwed and we are.

moonsbreath on January 25, 2012 at 11:14 AM

Cute response. Am I actually in favor of this plan of the Marxist. No, I am not. Government should not be in the the mortgage busniess at all. Government involvement in the mortgage business is what caused the vaule of my home to decline in the first place. So more government won’t fix the underlying problem, it will eventually make it worse. That sill doesn’t mean I would not take advantage of such a program because I would in fact take advatage of it. Hypocritical, yeah sure! But not so foolish as not to take advantage of it.

bgibbs1000 on January 25, 2012 at 10:43 AM

I’m sorry if you thought I was making light of your situation. You already know that if your mortgage was FNMA/FHLMC owned you would be able to refi it, although they ditched the streamline refi program over a year ago. People in your situation are the only ones I feel sympathy for. Appraisals are very subjective, contrary to popular opinion, and only matter if you are trying to sell, which in my experience, people who do construction/perm mortgages don’t do nearly as much as other borrowers. I was going to say that people in your situation are the only ones who should be allowed to participate in a program like this. I am guessing your credit, assets, etc. would be acceptable and your only issue is the appraisal. I didn’t say that because I was afraid it would sound like I approve of this crap by Obama, which I don’t.

Night Owl on January 25, 2012 at 11:18 AM

This is just a ploy to gain control of the people who avoided Fannie/Freddie in the first place.

PattyJ on January 25, 2012 at 11:13 AM

I was trying to avoid them and I thought I did. There was never any mention of them during the loan application process other than at first when the US Bank guy was explaining my options.

I just threw out my original post hoping some one could explain why or how Fannie Mae got their fingers in my loan. I guess the bank could sell it to them, but apparently they didn’t..I still make my payments to US Bank.

BigWyo on January 25, 2012 at 11:20 AM

Another program that will prolong the housing market slide downward. And it is to garner more votes for The One. This man does not care who he has to harm to get what he wants.

democratsarefools on January 25, 2012 at 11:24 AM

I am sure someone has talked about this but I haven’t seen it anywhere. What percentage of those with mortgage trouble be in the clear if they were not paying property taxes. Our mortgage is $738 a month. Our taxes are $1000 a month. Forget the under water issue for a minute. might not the problem be for some in foreclosure trouble that they can pay the mortgage but not the taxes?

IdrilofGondolin on January 25, 2012 at 11:24 AM

If you have 20% into the house, according to your own comment you can refinance. You said banks will refi an underwater property with 20% equity. So, why can’t you refi?
And, if you put 20% down, how far underwater can you be?
I’m not asking to be a jerk, just curious. Where I live middle-class housing only took maybe a 5% value hit at most.
Monkeytoe on January 25, 2012 at 11:07 AM

You’re not jerky at all to be curious. You are fortunate to live in a place housing only took a 5% hit. Some places took 50%, not speculative flippers, responsible people doing everything right. Yes, you can say the writing was on the wall, and I kick myself sometimes for not seeing the housing bubble, but not every person follows politics and just wants to save to buy a house they can afford when they have 20% down and are busy with life and not following the housing market and everything that affects it.

To answer you question, my house is probably worth about what I owe on it. So it has probably lost about 20% since I bought. In the state I live I’m considered lucky that is all it’s lost. So I could put 20% down again and re-fi or I could just keep paying my 5.75% fixed rate. Of course it is impossible to know exact worth unless you sell, it’s only worth what someone will pay, and we’ve made improvements, but banks will only look at
comps. I could get it assessed, but I don’t want to pay for that just to figure out how much I’d have to give a bank to get 20% in the thing so they’d let me re-fi.

rose-of-sharon on January 25, 2012 at 11:25 AM

So is this refi going to be available to anyone, regardless of credit history? Someone with a 550 FICO will get the same interest rate as someone with a 750 FICO.

Once again punish the responsible, reward the deadbeats. The Obama/Democrat way.

angryed on January 25, 2012 at 10:48 AM

They won’t pull a credit report so no one will know who is who. That’s why I said these loans won’t be saleable on the secondary market. The debt on mortgages is bought and sold like any other commodity, which is why there are standards in the first place. A purchaser of mortages buys, say, $10,000,000. of first mortgages with a term of 30 years and a rate of 5%. It is assumed that they are quality loans, that they have been underwritten and meet the guidelines of Fannie Mae, Freddie Mac, FHA or Va, who all have different guidelines.

Night Owl on January 25, 2012 at 11:26 AM

BigWyo on January 25, 2012 at 11:20 AM

Google “servicing a mortgage loan’…it’ll explain why the servicing is “sold” off separately from the loan.

d1carter on January 25, 2012 at 11:29 AM

Isn’t being underwater on a house only an issue if you’re trying to sell it?

I’m sure it sucks to see your investment valued at less than you bought it for, but, that’s the nature of investments. My IRA is currently worth less than what I bought the stocks at too. I don’t see the President pushing a bail out for my retirement account.

JadeNYU on January 25, 2012 at 11:01 AM

It matters if you try to refinance it as well. If the value fell enough to put you over 80% LTV, you would have to have PMI when you didn’t previously, and if it fell more, you might not be able to refinance it at all, at least without paying down the principal.

Night Owl on January 25, 2012 at 11:33 AM

The Obama administration is offering precious few details

Bottom line right there. The technical term for goals without plans to achieve is “fantasy”.

BobMbx on January 25, 2012 at 11:36 AM

There are a lot of holes in this plan, not the least of which is why homeowners who are current on payments more than three years after the collapse need government assistance. They may be underwater on their mortgages, but if they are making their payments, then they are at no risk as long as they don’t need to sell.

In a bad economy people often need to move for jobs. I am trying to sell my house in Illinois and I have an interested buyer who rents nearby. They rent because they own a home in Michigan in which they are underwater. They can’t get a loan on a second house and they are having trouble refinancing the first even though it is rented.

I have another friend who has been current on her mortgage and she wants to refi in order to save $500/month but the banks don’t want to help her. Another case of she just makes a little too much money to qualify for assistance.

I have looked at both situations and there is very little to no risk for the banks to extend the credit to make these loans possible. Our lending institutions are just frozen with fear of another housing crisis and their actions will, unfortunately, be more likely to cause one.

IOW, this is not a solvency problem, it is a liquidity problem and that is one thing gov’t loans can and should help.

Bill C on January 25, 2012 at 11:38 AM

I’m sorry if you thought I was making light of your situation. You already know that if your mortgage was FNMA/FHLMC owned you would be able to refi it, although they ditched the streamline refi program over a year ago. People in your situation are the only ones I feel sympathy for. Appraisals are very subjective, contrary to popular opinion, and only matter if you are trying to sell, which in my experience, people who do construction/perm mortgages don’t do nearly as much as other borrowers. I was going to say that people in your situation are the only ones who should be allowed to participate in a program like this. I am guessing your credit, assets, etc. would be acceptable and your only issue is the appraisal. I didn’t say that because I was afraid it would sound like I approve of this crap by Obama, which I don’t.

Night Owl on January 25, 2012 at 11:18 AM

Thanks for your qualification I appreciate it and yes as you said I already know the Freddie Mac Fannie Mae deal.

bgibbs1000 on January 25, 2012 at 11:39 AM

I was trying to avoid them and I thought I did. There was never any mention of them during the loan application process other than at first when the US Bank guy was explaining my options.

I just threw out my original post hoping some one could explain why or how Fannie Mae got their fingers in my loan. I guess the bank could sell it to them, but apparently they didn’t..I still make my payments to US Bank.

BigWyo on January 25, 2012 at 11:20 AM

A lot of people think if they go to their bank to get a mortgage it will stay there, but that is often not true. What happened with you is the bank sold the debt, (the amount of your loan) to Fannie Mae. Now they get the money they loaned you back to loan to someone else (I’m starting to sound like the guy from “It’s a Wonderful Life”). Your bank retained the servicing, which means they maintain your loan, collect payments, manage your escrow account if you have one, and that way they keep a certain portion of the profit from making the loan to you without tying up the actual cash.

Night Owl on January 25, 2012 at 11:45 AM

The vast array of new taxes that are scheduled to hit after the election are dazzling. I can’t wait for the shocked and dazed reaction of the uninformed “independent”. I intend to swell with smug condescension as I laugh at their lamentations.

DFCtomm on January 25, 2012 at 11:45 AM

HARP, Home Affordable Refinance Program, has not helped because it restricts the max indebtednes to 125% of the value of the home, and the interest rate wasn’t all that attractive. It’s a risky loan and the marketplace priced it accordingly.

HARP 2.0 was announced last Oct and still isn’t on the market. It removes the 125% Loan to Value restriction, but the same problem or worse will apply. It’s an even riskier loan and will be priced accordingly. Most applicants won’t get much relief from it, even if they do qualify.

Draggin FHA into the mix will never work. They are already insolvent, and they are not a direct lender. FHA relies on private banks to originate the loans; FHA simply provides the loan gaurantee if the loan goes bad. IF congress can agree on a plan (huge doubts) these will be riskier loans than the normal FHA loan and thus will be priced accordingly. Probably much higher UFMIP (mortgage insurance), much higher annual MIP (mortgage insurance) and higher rates. This will blunt the effectiveness of any such program.

It’s easy to open the spiggots of the lending industry without all these silly programs. I could name 5 ways to do it without spending a dime of anyone’s money.

Here’s one: reduce the required waiting time for a Conforming, FHA or VA loan after a borrower has suffered a short sale to 2 years. There is a LOT of pent up demand in this borrower profile.

DrW on January 25, 2012 at 11:50 AM

I’ll be lucky to afford a house by the time I’m 30, let the market work, don’t make me subsidize other people’s mortgages when I can’t responsibly afford one yet!

drlax15m on January 25, 2012 at 11:53 AM

I’m sending this Congress a plan that gives every responsible homeowner victim of the government’s LAST intervention in housing the chance to save about $3,000 a year on their mortgage

The program will be named Cash for Clunkers II“!!!

landlines on January 25, 2012 at 11:54 AM

I am no fan of Obama, however if we can finally have some mortgage relief for those of us who actually paid on time each month and did not miss payments, live in our home, did not try to flip our home, did not buy a house that was too big or too expensive, did not take out a home equity load and use the money to buy a garage full of quads or build a 4th bathroom, and who did not walk away from our homes…i am all for it.

arizonateacher on January 25, 2012 at 11:55 AM

loan…not load sorry

arizonateacher on January 25, 2012 at 11:56 AM

. IF congress can agree on a plan (huge doubts) these will be riskier loans than the normal FHA loan and thus will be priced accordingly. Probably much higher UFMIP (mortgage insurance), much higher annual MIP (mortgage insurance) and higher rates. This will blunt the effectiveness of any such program.

It’s easy to open the spiggots of the lending industry without all these silly programs. I could name 5 ways to do it without spending a dime of anyone’s money.

Here’s one: reduce the required waiting time for a Conforming, FHA or VA loan after a borrower has suffered a short sale to 2 years. There is a LOT of pent up demand in this borrower profile.

DrW on January 25, 2012 at 11:50 AM

I read that this program would have one interest rate, something like 4.25% I think, but it was a couple weeks ago and I can’t remember where I read it.

Night Owl on January 25, 2012 at 11:56 AM

I am no fan of Obama, however if we can finally have some mortgage relief for those of us who actually paid on time each month and did not miss payments, live in our home, did not try to flip our home, did not buy a house that was too big or too expensive, did not take out a home equity load and use the money to buy a garage full of quads or build a 4th bathroom, and who did not walk away from our homes…i am all for it.

arizonateacher on January 25, 2012 at 11:55 AM

Me too.

We’ve had to sit back and learn about all the behind the scenes dealings of these same banks who have taken our money for their own bailout and then the extra money given by way of the backdoor. I’m not asking for the principle on my home to be lowered, I’m asking for help in refinancing my underwater mortgage because of the dirty dealings of these same banks and along with the government. And because of both their houses, my house is worth $60,000 less and I owe what my home is now worth through no fault of my own.

moonsbreath on January 25, 2012 at 12:09 PM

Again, I am talking about finally helping the people who did and continue to do the correct thing. I live in AZ, ground zero for the housing melt down, I know people who are of a questionable legal status who have gotten help, I know people with a garage full of quads purchased with home equity money who got help, and I know plenty of people who simply walked away. Democratic or republican, I don’t care, just a little help for those of us who continue to pay each month on time and are trying to keep our neighborhood together.

arizonateacher on January 25, 2012 at 12:16 PM

What would be a terrible game changer would be for him to take away the mortgage interest tax deduction.

I could see him doing something like that. Force people whose mortgages are safe to refinance where they might save 1 percentage point and take away the mortgage deduction. He might even force people who don’t have Fannie or Freddie mortgages to become a part of that program when they refinance.

I don’t trust this guy.

lea on January 25, 2012 at 12:19 PM

Me too.

We’ve had to sit back and learn about all the behind the scenes dealings of these same banks who have taken our money for their own bailout and then the extra money given by way of the backdoor. I’m not asking for the principle on my home to be lowered, I’m asking for help in refinancing my underwater mortgage because of the dirty dealings of these same banks and along with the government. And because of both their houses, my house is worth $60,000 less and I owe what my home is now worth through no fault of my own.

moonsbreath on January 25, 2012 at 12:09 PM

I think the sentiment here hits the nail on the head. I’m not even asking for any help re-financing my loan, nor do I expect it. But I’d be a whole lot more satisfied being stuck in the situation I’m in (an underwater house I’m not able to re-fi at a lower rate even with the same principle) had the banks been allowed to fail. But it does sting after the government, the banks, the rating companies, and irresponsible home owners all ruined the housing markets; they were bailed out and suffered no consequence, yet the ones who were responsible all along have no relief. I’m not asking for government sponsored relief for myself, but the banks shouldn’t have gotten it either. It’s been said here many, many times, and I hope at some point the Republican party listens if a situation like this ever occurs again, “LET THEM FAIL!” The banks, the car companies, let the free market work. The bailouts never work as intended and always just give the government more power to abuse.

rose-of-sharon on January 25, 2012 at 12:21 PM

We’ve had to sit back and learn about all the behind the scenes dealings of these same banks who have taken our money for their own bailout and then the extra money given by way of the backdoor. I’m not asking for the principle on my home to be lowered, I’m asking for help in refinancing my underwater mortgage because of the dirty dealings of these same banks and along with the government. And because of both their houses, my house is worth $60,000 less and I owe what my home is now worth through no fault of my own.

moonsbreath on January 25, 2012 at 12:09 PM

So we should punish the banks and take from the taxpayers because you signed a loan agreement to pay for your home at a specific value; and the value of the home you bought dropped after you bought it?

Ok, the computer I own is worth about 10% of what it was when I bought it two years ago; can I get you to give me the $500 or so I lost there? Or is it only homes that we should remove all risk or loss?

Sure I willingly agreed to buy my computer at the price I paid; but it’s worth less now so I want to make other people pay for it now…

Why should I have to give you money for your depreciated purchases if you don’t pay me for mine?

gekkobear on January 25, 2012 at 12:23 PM

So we should punish the banks and take from the taxpayers because you signed a loan agreement to pay for your home at a specific value; and the value of the home you bought dropped after you bought it?

Ok, the computer I own is worth about 10% of what it was when I bought it two years ago; can I get you to give me the $500 or so I lost there? Or is it only homes that we should remove all risk or loss?

Sure I willingly agreed to buy my computer at the price I paid; but it’s worth less now so I want to make other people pay for it now…

Why should I have to give you money for your depreciated purchases if you don’t pay me for mine?

gekkobear on January 25, 2012 at 12:23 PM

The computer companies didn’t receive a government bailout under the premise they needed it for the liquidity to keep lending or the economy would collapse. Banks have always re-financed mortgages at current rates, computer companies have not, apples and oranges. I’m against Obama legislating what banks do now, but yes I’m upset they got bailed out and now are not willing to re-fi to credit worthy home owners. The conservative answer is not to force them to, but that they never should have gotten bailed out to begin with.

rose-of-sharon on January 25, 2012 at 12:29 PM

Here’s one: reduce the required waiting time for a Conforming, FHA or VA loan after a borrower has suffered a short sale to 2 years. There is a LOT of pent up demand in this borrower profile.

DrW on January 25, 2012 at 11:50 AM

Untended Consequence calling….

The 2 year restriction makes people think twice about walking away since they know they won’t be able to buy a house again for at least 2 years. Take that restriction away and it will open up a flood of people walking away from one loan to get another one knowing there is no penalty from walking anymore.

angryed on January 25, 2012 at 12:30 PM

I’m against Obama legislating what banks do now, but yes I’m upset they got bailed out and now are not willing to re-fi to credit worthy home owners. The conservative answer is not to force them to, but that they never should have gotten bailed out to begin with.

rose-of-sharon on January 25, 2012 at 12:29 PM

Not really. If they are credit worthy, they can get a loan on their own without Obama’s plan. The fact they can’t get a lona means they are not credit worthy.

This insanity is CRA Part 2. Force banks to lend to people who they would otherwise not lend to. And the result will be the same. Billions of tax dollars wasted with a whole new round of foreclosures in a year or two. But hey, whatever gets Obama through November.

angryed on January 25, 2012 at 12:32 PM

my house is worth $60,000 less and I owe what my home is now worth through no fault of my own.

moonsbreath on January 25, 2012 at 12:09 PM

That’s capitalism. Not every investment in real estate is guaranteed to appreciate 10% a year.

angryed on January 25, 2012 at 12:40 PM

It also won’t do anything to prevent or minimize foreclosures, which is one of the actual problems in the housing market.

Why not? Could $3,000 off your monthly payments really not mean the difference between staying in your home and foreclosure? And secondly, if foreclosures are a real problem, why aren’t we pushing for a policy solution (if this doesn’t represent one itself)?

ernesto on January 25, 2012 at 12:41 PM

Not really. If they are credit worthy, they can get a loan on their own without Obama’s plan. The fact they can’t get a lona means they are not credit worthy.

This insanity is CRA Part 2. Force banks to lend to people who they would otherwise not lend to. And the result will be the same. Billions of tax dollars wasted with a whole new round of foreclosures in a year or two. But hey, whatever gets Obama through November.

angryed on January 25, 2012 at 12:32 PM

No, you are wrong about credit worthy people able to get loans now. Not like they could at the height of the housing bubble when banks showed no restraint giving loans, yet they got bailed out; but the people who took the loans and have have responsible with them are not getting bailed out. That is why there are people who are bitter, and I don’t blame them. I don’t think another bailout is in order, you don’t fix a wrong with another wrong, but it is understandable why people are upset and Obama is targeting them and we should understand that.

For instance, like many of us here have related, we put 20% down on our first homes 5-8 years ago. We got a fixed rate in the 5.5% range, made every payment. Now housing prices have dropped. Banks got bailed out so they said they would have money to keep lending and keep the economy going. But now those of us in homes with less than 20% equity cannot get re-financed from private banks, the banks who were bailed out.

We were credit-worthy when we took those loans out, nothing has changed, we’ve made every payment, we are just as credit-worthy now if not more so; yet the bank gets bailed out and we don’t. That is fine. But next time I want to elect republicans who will NOT bail out banks in the first place. That the mantra we should be repeating over and over this election cycle.

rose-of-sharon on January 25, 2012 at 12:41 PM

That’s capitalism. Not every investment in real estate is guaranteed to appreciate 10% a year.

angryed on January 25, 2012 at 12:40 PM

Capitalism is bailing out the banks with tax payer money though?

rose-of-sharon on January 25, 2012 at 12:42 PM

After reading the comments here, I’m going to give a little unsolicited advice based on my experiences over 40+ years of home ownership in various locations around the country:

1. Appraisers work for someone else: Always do your own “appraisal,” back it up as best you can (neighbors, comparables, public records, etc.) and be very suspicious of figures which are significantly different from yours. To resolve any questions you cannot, it’s a really good investment to hire your own appraiser…rather than rely on someone else’s employee.

2. Read and understand every piece of paper you sign. Read EVERY WORD. I have personally found $1000 – $2000 errors on each and every contract I have examined: none of them were in my favor. Your spouse may laugh at you for doing this, but persist: he/she will quit laughing after the first $1000 you find. If you cannot do this yourself, you should definitely hire an attorney to protect your interests and do the reading for you. I have made the bank modify the terms of EVERY mortgage contract they presented to me before signing: it’s amazing what provisions they try to sneak in (or accidentally include or exclude)!! Make sure you are not penalized for pre-paying or refinancing, that you are free to choose your homeowners’ insurer, and that any requirement for PMI disappears at some point. Make sure that everything else you discussed with the bank is documented in writing and signed by the bank.

3. After your property is “closed,” make a personal visit to the county offices (or wherever property records are recorded), and VERIFY that the papers are actually filed, that ALL the papers are filed, and that anything important that the bankers told you is officially documented. NEVER trust someone else’s word on this: Mortgage Insurance won’t save you from filing screw-ups (the insurance is for the bank…not YOU).

4. If you ever receive a request to pay your mortgage to some other entity, insist upon an “assignment” IN WRITING, explicitly identifying the new entity, from the current mortgage holder BEFORE you start sending payments to someone else. The “paperwork mess” you hear about in the media…the one which has delayed and complicated recovery for months or years in many cases…is only possible because people did not do this. If you owe someone a substantial sum of money, it is only prudent to KNOW FOR SURE that any payments you make are used for discharge of that debt and NO OTHER PURPOSE: the first step in this process is to KNOW FOR SURE who you are legally obligated to pay!! You DON’T want to be tied up in court after decades of mortgage payments facing someone who claims you did not pay your mortgage because you sent your payments to the wrong institution. NEVER pay someone new just because you get a bill or statement in the mail: continue sending your payments (on time) to the original mortgage holder until you receive a written “assignment” from the original holder. Repeat this process each time your mortgage is sold: always insist on a written assignment/release.

5. Never believe anyone who tells you that an objectionable clause in a mortgage (or any contract) is “standard” and/or “non-negotiable”. If they continue to do this, insist on talking to a supervisor…or walk away. Always remember that people change jobs and companies/banks get sold or go out of business, so “If it isn’t in writing, it doesn’t exist”!

In summary, you must understand what a “contract” is, and you must insist on being a full participant in arriving at any agreement you sign. This is always important, but becomes VITAL when you are making a huge purchase like a house!!!

landlines on January 25, 2012 at 12:44 PM

No, you are wrong about credit worthy people able to get loans now. Not like they could at the height of the housing bubble when banks showed no restraint giving loans, yet they got bailed out; but the people who took the loans and have have responsible with them are not getting bailed out. That is why there are people who are bitter, and I don’t blame them. I don’t think another bailout is in order, you don’t fix a wrong with another wrong, but it is understandable why people are upset and Obama is targeting them and we should understand that.

Totally agree. My husband and I have exceptional credit. We also have a high rate interest only mortgage we’d like to refinance into a 30 year fixed rate mortgage. Because we have good credit and a high interest rate, our lender isn’t interested in selling to Fannie or Freddie and they aren’t interested in buying as they’re supposed to be helping “struggling” homeowners.

We’ve tried to refinance, only to be told that closing costs will be around $8,000 – $10,000 and PMI will run around $400 a month, which means we’ll be wiping out our savings to cover closing costs and paying more on our mortgage than we do now – just so we can pay off a piddly $100 or so a month. Of course the bank would be more than happy to roll the closing costs into our new mortgage, which would put us even further underwater.

We’ve asked for a rate reduction – not a new mortgage just a rate that isn’t more than twice the current rate – but the lender says no.

KimS on January 25, 2012 at 1:05 PM

We have a unique and historic novelty here where millions of people who did nothing wrong are literally stuck in loans paying higher then market value due to government engineering. Comments that that is how capitalism works or that is the risk you take when you take a loan are totally off base.

Resolute on January 25, 2012 at 1:08 PM

That’s capitalism. Not every investment in real estate is guaranteed to appreciate 10% a year.

angryed on January 25, 2012 at 12:40 PM

That’s a very harsh reply. You are correct, but this particular environment has never existed before, and perfectly innocent people go caught up in it. I have experience in this area, but most people don’t. Until this blew, normal people accepted certain things on faith (as well as past experience), housing values had never tanked like this before (except maybe the depression, but I wasn’t around for that-LOL). If you put 20% down you were pretty safe.

I was around when interest rates were 21% and people still bought homes, but they did it with some pretty creative financing, which hinged on home values going up, and they did.

The only way I see to get out of this problem is to focus more on the borrower- their income, assets, work history, credit history, etc., and less on the value of the house. You can tell who is responsible and who is not by these things. When you go buy a new living room set on credit, they don’t make you get an appraisal to be sure they are not loaning you more than it’s worth, it’s up to you to be sure it’s worth what you’re paying for it, and they do this because you have a history of paying back what you borrow. I’m not saying to get rid of appraisals altogether, but I don’t think they should be the main factor.

Night Owl on January 25, 2012 at 1:10 PM

different speech, same old shit

burserker on January 25, 2012 at 1:15 PM

A couple of notes here, NOTHING is going to happen regarding the Failed Presidents plan concerning housing. Secondly, the housing will recover in 4-5 years is left untouched by government and the market drives the recovery. This means the remaining foreclosures HAVE to happen and the Fanny and Freddie loses incured and these agencies START privatizing. THE HOUSING MUST BOTTOM OUT FIRST. These measures are the ONLY things to a housing recovery, which of course drives the economy. In the end prices will stabalize and NO ONE should ever get another housing loan when they could never afford it in the 1st place. Thank all this crap to Clinton and the Democrats, putting minorities and some whites in homes they were going to loose, liberal progressive policies.

Then of course the Wall Street sold then in package knowing they would loose trillions in the end in market lose.

Brushjumper on January 25, 2012 at 1:16 PM

…due to government engineering. Comments that that is how capitalism works or that is the risk you take when you take a loan are totally off base.
 
Resolute on January 25, 2012 at 1:08 PM

 
Re: totally off base
 
Are you saying that the comments are mean (off base) and shouldn’t be made?
 
Or are you saying that the comments are off base because we’re no longer in capitalism’s orbit due to the government engineering?

rogerb on January 25, 2012 at 1:16 PM

So we should punish the banks and take from the taxpayers because you signed a loan agreement to pay for your home at a specific value; and the value of the home you bought dropped after you bought it?

Ok, the computer I own is worth about 10% of what it was when I bought it two years ago; can I get you to give me the $500 or so I lost there? Or is it only homes that we should remove all risk or loss?

Sure I willingly agreed to buy my computer at the price I paid; but it’s worth less now so I want to make other people pay for it now…

Why should I have to give you money for your depreciated purchases if you don’t pay me for mine?

gekkobear on January 25, 2012 at 12:23 PM

It’s obvious you don’t understand what I and others are saying here. My home value didn’t decline because of the market, it declined because of the involvement of people in Washington meddling with mortgages and the big banks bundling great mortgages with terrible ones and then lying to investors. Which, in my opinion, no one should be investing in people’s mortgages. This rouse crashed and now people like me, who have a credit rating of over 800, never late on my mortgage or bills, etc. are stuck with not being able to refi at a lower interest rate because the value of my home has dropped because of the government.

If you and others don’t understand that, well, I can’t help you.

moonsbreath on January 25, 2012 at 1:17 PM

That’s capitalism. Not every investment in real estate is guaranteed to appreciate 10% a year.

angryed on January 25, 2012 at 12:40 PM

No dear, that’s the government getting involved with a free market and screwing it up.

moonsbreath on January 25, 2012 at 1:21 PM

No dear, that’s the government getting involved with a free market and screwing it up.

moonsbreath on January 25, 2012 at 1:21 PM

Good point!

Night Owl on January 25, 2012 at 1:27 PM

No dear, that’s the government getting involved with a free market and screwing it up.
 
moonsbreath on January 25, 2012 at 1:21 PM

 
Should the government get involved in your situation?

rogerb on January 25, 2012 at 1:29 PM

Or are you saying that the comments are off base because we’re no longer in capitalism’s orbit due to the government engineering?

rogerb on January 25, 2012 at 1:16 PM

Yes, people are stuck in higher then market value loans because of government engineering. Comments that people got themselves into these situations due to fluctuations and risks inherent in capitalism are wrong.

Resolute on January 25, 2012 at 1:30 PM

That’s capitalism. Not every investment in real estate is guaranteed to appreciate 10% a year.

angryed on January 25, 2012 at 12:40 PM

No dear, that’s the government getting involved with a free market and screwing it up.

moonsbreath on January 25, 2012 at 1:21 PM

+1000

J.E. Dyer on January 25, 2012 at 1:39 PM

I have bought high and sold low 4 times in my lifetime. I had to be a landlord 2 of those times. I have just been in the unfortunate place of needing to move when the market had dropped or been stagnant, so by the time you include the closing costs on both sides of the move, it was never in favor of my finances.

Finally, in my mid-fifties, after another move, I bought in a slow market (this market had NOT risen or had a bubble in 20 years). Amazingly, my condo has gone up a little bit since 2006 because the developer built slowly and didn’t dump units on the market. I did an 80 20 loan with a credit union that does NOT sell their loans ever. I was happy with that arrangement. They serviced the loans and I knew my “bankers” by face and name.

And the interest rates back in 2006 were 5.75 for the first and 8.5% or something for the 2nd. I worked hard, saved a LOT of money in cash (was not in the market in 2008, was in CASH), and went to a different credit union to refinance since the first credit union was very happy with that original arrangement and their interest rates in 2010 were not as market competitive.

Before I re-fi’ed, I did my homework as someone above suggested. I paid for a professional appraisal first. Then I shopped my loan to the various community banks and local credit unions. The 2nd credit union I banked with had a VERY competitive 15 year rate. I had enough cash to payoff the 2nd mortgage (orignally 20% of the purchase price) and then some. When I finished my refi, I was left with a 4.25% APR loan, 15 year fixed, and had 28% “equity”.

Now here it is 2 years later and surprisingly, the rates have dropped almost another percentage point, which I had not expected. If I wanted to pay almost $2K in fees, I could save another $177 a month.

However, I am doing a career transition, so this really isn’t an option right now. It may be in a few months, but who knows when this deficit spending inflation is going to hit the economy. My plan instead is to accelerate my mortgage payments, to pay it off early. I gain enormous satisfaction seeing the principle drop about $750 a month as it is. I can’t wait to wee what happens when I double the payment each month. Currently, my loan is 63% of market value, and it feels really good after buying high and selling low every other time I have owned property in my lifetime. I have never had real equity before. I guess the secret was moving to an area of the country where the economy has been in the toilet for 3 decades and there was no housing bubble AT ALL (Michigan). I managed to LOSE money TWICE selling houses in California. The irony is mind boggling.

karenhasfreedom on January 25, 2012 at 1:55 PM

This is cash for clunkers with no wheels.

MrMoe on January 25, 2012 at 2:35 PM

I’m a heartless b!tch.
$hit happens.
Tough luck.
I have been homeless, living out of my car, in a tent.
So it’s not that I can’t identify.
I’m just not sympathetic.
If you lose your home, then suck it up & drive on.
I’ve lost many many things in my life.
It’s just stuff.
And it isn’t the govt’s, nor anybody else’s job, to help you own your own home.

Badger40 on January 25, 2012 at 2:35 PM

Gee. What happened to GM and Chrysler when they took advantage of easy offers from the Government?

unclesmrgol on January 25, 2012 at 2:45 PM

Should the government get involved in your situation?

rogerb on January 25, 2012 at 1:29 PM

Honestly, I’m not sure.

It would be nice if I could go to a lender and show that I’m credit worthy, etc. and be able to refi with no problem. But, then again, lenders are regulated by the government.

moonsbreath on January 25, 2012 at 3:03 PM

Obama’s plan is just another failed case of ‘SSDD’!

easyt65 on January 25, 2012 at 3:10 PM

People are stuck in higher then market value upside loans because of government engineering. It isn’t even a bailout to ask the government to fix its own mistakes. This situation would not exist without the government intervention that already occurred. Those of you saying to suck it up it is just the market are somehow oblivious. The market can not correct this problem since it was unique government created situation. The housing market in general can not possibly be stable as long as 10 million people are locked into non- market rate loans.

Resolute on January 25, 2012 at 3:34 PM

Obama and our government need to get out of the real estate business. Completely. Out.

Robin888 on January 25, 2012 at 4:37 PM

Monkeytoe on January 25, 2012 at 11:07 AM

rose-of-sharon on January 25, 2012 at 11:25 AM

Someone here – either you guys or me don’t seem to understand the terms being used. Equity is the difference between what you owe and what the house is worth. By my understanding, being “underwater” means your house is worth less than you owe on it. That means you have zero or negative equity in the house. So if you are underwater you can’t possibly have 20% equity in the house. If you are underwater, and the bank requires 20% down to do a refi, then you need to come up with that amount of cash as a down-payment in order to get a refi. But that’s a cash down-payment, not equity – at least not until you close the new loan. in that respect, your comment about banks requiring “20% equity” to do a refi for an underwater house is a non-sequiter.

Besides I just did a cash-out and interest rate lowering refi onto a VA loan, which only only requires 10% down-payment or equity.

dentarthurdent on January 25, 2012 at 4:51 PM

It’s my tax dollars and I want it now!

OTTO on January 25, 2012 at 4:51 PM

Housing is INTRAstate commerce. GTFO, nuff said.

Texas had protections, Florida did not. I’ve personally seen prices in Florida increase at about 10% a year from mid-90s till the CORRECTION (wasn’t a crash). 100k home (like a 3/2) in 95 became 200-250k in 2005, didn’t matter how old it was, or what condition (within reason). In Texas a 5/3 home could be 175k in a really good neighborhood, in FL that might be half a mil or more.

incompetence at the local and state level, thanks media for no coverage. Federal level is not the answer.

John Kettlewell on January 25, 2012 at 4:56 PM

Winning or losing in the housing market is all about timing. If you are forced to sell at a bad time, as many military people have to do, it sucks. Being underwater only matters if you’re in that kind of situation.

I lived in my first house for 10 years, then when I tried to sell it in 1994, and got a decent contract price, the VA appraiser came in $10k below the sale price. I cancelled the deal and put it up for rent for a year and a half and made money on it that way. Then when the market came back up in 1995, I sold it for $20K more than the earlier VA appraisal.

If you’re underwater, and if you have the option to stay put or rent the house – do it, and don’t sell until the market climbs again – which it always does – UNLESS obummer completely destoys our economy.

dentarthurdent on January 25, 2012 at 5:01 PM

It would be nice if I could go to a lender and show that I’m credit worthy, etc. and be able to refi with no problem. But, then again, lenders are regulated by the government.

moonsbreath on January 25, 2012 at 3:03 PM

Until recently, the government was pushing the lenders to give loans to anyone and everyone regardless of ability to pay and many people bought into houses they could not afford, whihc led to the burst – so now the Gov has gone the other way.

However, in my experience, if you really have decent credit, and some equity in the house, it was very easy finding banks willing to give me a cash-out refi. But then I bought a house I could afford to begin with, put a decent down-payment on it, I’ve been in it for 11 years, and despite the current market my appraisal came in about $100K higher than what I owe – which was still well below what I paid for it despite a prior cash-out refi.

dentarthurdent on January 25, 2012 at 5:10 PM

Monkeytoe on January 25, 2012 at 11:07 AM
rose-of-sharon on January 25, 2012 at 11:25 AM
Someone here – either you guys or me don’t seem to understand the terms being used. Equity is the difference between what you owe and what the house is worth. By my understanding, being “underwater” means your house is worth less than you owe on it. That means you have zero or negative equity in the house. So if you are underwater you can’t possibly have 20% equity in the house. If you are underwater, and the bank requires 20% down to do a refi, then you need to come up with that amount of cash as a down-payment in order to get a refi. But that’s a cash down-payment, not equity – at least not until you close the new loan. in that respect, your comment about banks requiring “20% equity” to do a refi for an underwater house is a non-sequiter.
Besides I just did a cash-out and interest rate lowering refi onto a VA loan, which only only requires 10% down-payment or equity.
dentarthurdent on January 25, 2012 at 4:51 PM

I understand it like you, but I’m not sure what the confusion is. Maybe I’m using equity more broadly interchangeably with what you are calling downpayment, but the basic premise is the same. Or maybe when I’m taking about re-financing with no disclaimers I’m implying re-financing the full amount owed on the mortgage, without taking anything out or putting anything down. That used to be common practice before the crash, keep the same balance but re-fi at the current rate, now I’m finding banks are requiring that you have 20% equity in the house to do that. Of course I don’t want to put down a down payment, I want to keep the same balance but re-fi at the current rate. I wouldnt mind a bit the banks saying no to this typically. But after the banks bailouts, it does come across that everyone benefit from he bailouts but the responsible ones, and that is what Obama is playing off of.

rose-of-sharon on January 25, 2012 at 5:45 PM

Until recently, the government was pushing the lenders to give loans to anyone and everyone regardless of ability to pay and many people bought into houses they could not afford, whihc led to the burst – so now the Gov has gone the other way.

dentarthurdent on January 25, 2012 at 5:10 PM

I don’t care who was pushing who to lend, the absolute bottom line is the people who actually signed documents and purchased houses they could not afford were responsible. Especially the liar loan crowd. They knew they were lying when then signed onto that loan. Rule of thumb, you only take on a payment that is 28% of your monthly income. Kept to that, even reduction in salary to part time would cover the payment. Plus having a reserve of about 3 months is also prudent.

And it isn’t the govt’s, nor anybody else’s job, to help you own your own home.

Badger40 on January 25, 2012 at 2:35 PM

You aren’t heartless, you are a realist and self responsibility is key!

DoubleClutchin on January 25, 2012 at 6:08 PM

The problem is that the republicans who voted for TARP are going to have a hard time fighting Obama’s housing programs without looking like they care about “rich bankers” more than they care about home-owners. And it’s true, that the Democrats are consistent in that they want government fixing things and the Republicans have not been consistent in wanting the free market to run it’s course. That is why we need to keep hold our elected officials feet to the fire and not let them do crap like bail out banks. It’s not just that one vote, but then all this that follows. Bush and his lame, “I had to go against the free market to save it” or whatever crap he said at the time.

rose-of-sharon on January 25, 2012 at 6:22 PM

Obama doesn’t care if it is implemented or not as long as he gets to repeat it over and over again on his campaign stops, er I mean while he’s out working… er, uh, what exactly is it he does out of his office?

BTW, he is in Phoenix today and the building where my wife worked is on the “parade route” – everyone was giddy with excitement, posting on their Facebook pages they could see the “caravan” go by. Woo woo! Useful idiots.

Mr_Magoo on January 25, 2012 at 6:56 PM

Dumbest idea of the decade.

He is again borrowing money from the Chinese or printing it and passing it out to greedy idiots in order to buy votes.

$3000 on a $250,000 loan? B.F.D. 1% will not make a hill of beans difference to anyone with a sizable loan they shouldn’t have made in the first place.

MadJayhawk on January 25, 2012 at 9:43 PM

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