A Mouse Trap for Independents: What’s the Catch to Obama’s Latest Free Goodies?
Monday, President Obama announced a plan to force banks to refinance home mortgages for those who are upside-down in their property. For those of us who bought high and now couldn’t dream of selling at a profit, this is a wonderful way for us to benefit from a government that seems to spend on programs that’ll impact us, right?
But then we take a few steps closer and realize if we fall for this, we’re being sucked into something we already kinda fell for a few years back.
The original mortgage plan, put into effect in 2009, was designed to allow those who are current with their payments but have little or no equity in their home to secure lower mortgage rates. The President’s Home Affordable Refinance Program has helped only 894,000 borrowers since the spring of 2009. The administration had originally hoped up to 5 million homeowners would benefit. I guess this didn’t work as planned. This revised plan is supposedly going to help up to 1.6M homeowners and will force banks, on paper, to take a loss on the mortgages of people who over-extended themselves.