Homeowner Bailout: Actually Another ARM  

Posted by Rob Barton in , ,

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CNN) -- When struggling homeowner Eddie Morrison heard about the government's $700 billion bailout plan for banks and Wall Street firms, he felt left out.

But the Morrisons were saved when their mortgage holder, California-based IndyMac, was seized by federal regulators recently. The new administrator of the failing bank, Federal Deposit Insurance Corp. Chairman Sheila Bair, put a freeze on foreclosures, giving people such as the Morrisons a chance to create a loan payment they can afford.

Bair has proposed giving homeowners who are 60 days late on their mortgage a chance to reduce high interest rates and extend the length of the loan if they qualify.

But the Morrisons say they like the plan. Bair's IndyMac loan-modification program dropped their payment from $3,200 per month to $1,900 per month for five years. After that, the payments start to go back up.

After that, the payments start to go back up. So, in other words, the solution to the mortgage crises is not actually solving the problem, but delaying it for five years. Just in time for His O-liness to be voted out of office, essentially laying the blame at the feet of Obama's successor. If Obama does get re-elected, then just extend the time for another few years.

Way to solve the problem, huh? Solve it for the democrats, anyway.


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