I'm from the government, and I'm here to help...
- Posted by Sharon McNary
- on February 13, 2009 10:05 AM
U.S. Treasury Secretary Timothy Geithner wants to spend $50 billion to prevent home foreclosures. The plan might create a standardized way for lenders to evaluate which mortgages to modify before homeowners default.
That’s important, because lenders now have discretion over which mortgages to save and which go into foreclosure. Often, lenders won’t even consider rewriting a mortgage until the borrower stops paying. This plan would analyze default risks while homeowners are still current on their payments.
Homeowner Stephen Sprague of Bloomington Springs, Tenn., is retired and doesn’t really need mortgage help. But he’s got an idea for Congress:
“Set and lock mortgage return rates across the board and forgive unpaid balances.”
Jonathan Rich of Somerville, Mass., doesn’t need help with his two mortgages on his home and rental unit, but says a plan to keep his neighbors out of foreclosure would benefit him.
“I think the government should seek out those with abusive mortgage terms and offer them refinancing at a fixed, reasonable rate.”
Share your 2009 real estate plan with Marketplace, and read on to see what mortgage help others in the Public Insight Network want — and don’t want - from the government.
Homeowner Nick Damato of Columbus, Ohio, would like to buy a condo closer to his job, but worries his house won’t sell in this market. He wants HUD to pay 2004 prices for homes whose owners can’t continue to make payments, reasoning that after the market improves, the government could sell the houses, possibly at a profit.
Homeowner William Freeman of San Diego rented for years, and finally bought a house. He frowns on mortgage aid plans because they raise the public’s expectations that that the government will always rush in to pick up the pieces of others’ dicey deals.
Everyone from Wall Street to Main Street who benefited over the past decade by making risky decisions should suffer financially when those risky decisions went bad.
Librarian Sharon McKinley, of Columbia, Md., paid off her mortgage ahead of schedule. She’d like to sell her house and move to Baltimore, but will likely wait for the market to recover. She worries bailout plans reward people who took out risky mortgages.
How do we help people stay in their homes without simply giving it to them? That’s the problem. A large number of unscrupulous lenders took a lot of unsuspecting people for a ride, but we can’t simply provide free homes!
Dean Klein of Asheville, N.C. doesn’t mind helping distressed homeowners, but wants interest rate breaks for those whose mortgages are paid up.
Be fair. If folks with adjustable loans get theirs fixed, offer people who have played the game well to lock into lower rates.
Attorney Christina DiEdoardo of Las Vegas, doesn’t need help for her own mortgage, but her clients could benefit from a change in bankruptcy laws.
Giving bankruptcy judges the authority to re-write mortgages could keep many people in their homes and stop the plague of foreclosure and downward spiral of housing prices.
But Kate Garrett of Roslindale, Mass., a renter who sold her house in 2006 for a profit, is waiting for prices to fall farther before she buys again in a Boston market she sees as overpriced. She takes more of a free-market, tough-love approach:
Congress should not allow people to reduce their principal payments. That just props up the housing market at an inflated price. The market needs to correct to a level people can actually afford. Even though it’s painful to many homeowners, the benefit will ultimately be more widespread to all.
Overheard on the Trading Floor
Are you buying stamps instead of stocks, or art instead of bonds?
Elaine Frankowski said: Buying stamps for investment purposes is the stupidest thing a person can do unless he/she is an expert collector, is More
What's your employer doing to help avoid worker burnout?
RMS said: Until the ecomonic conditions improve, companies will care less and less about the employees. Most managers are too concerned about More
Was college worth it?
Jennifer said: Yes and no. I went to an out of state major university, on scholarship, with no idea what I wanted More
How does foreclosure affect children?
GK said: I had a similar childhood to another poster here. My parents lost jobs, a business and our house in the More