news has popped a non detailed story on how our govt wants to modify home loans to keep people in foreclosure from losing their homes. now i'll be the first to say the details aren't out there yet as i am writing this or i haven't found them...but i have some major problems with this idea. the only thing being said right now is that mortgage rates will be modified (lowered) for a 5 year term.
my first problem is what about those who are on time paying? why should they not enjoy the same treatment of a lowered rate for the same 5 years? is this what our country has come to...punishing those who follow the rules and made wise decisions? yet doing whatever to help bail out those who didn't?
my next issue is besides it being applied unfairly but punishing those who pay their bills, and find a way to make needs meet, is how are they going to make sure this isn't abused. i mean people with large families who own multiple homes and get rental income off the books? or second homes or even people who even after the 5 years still aren't going to be able to meet up to their promises? not to mention who;'s going to say how much. right now everyone has different rates they pay based on credit scores. are they going to allow bankruptcy judges to make that call under some "guidelines," so those who are connected do better than those who aren't?
then i think about who owns these mortgages. it's not all robber barons. it also includes union pensions, state run pensions, small foreign cities, many different groups that when broken down aren't all rich guys with fat cigars in their mouths. these buyers who signed a legal document and agreed to the terms, and not keeping up their end of the bargain. these pension holders who rely on this income at a certain rate are going to get less. that is hardly fair or just. it will also affect mortgage buying in the future. groups knowing that at any time the govt could change the legal terms at their will...well it means a bad investment. this will have huge ramifications.
then there is talk and i'll clarify just talk at this point about altering the principal amounts. joe biden said it, in his debate with sarah palin. the ramifications of this would shake and shatter what is left of the financial world. you cannot just change the contract because you want to and someone who didn't plan ahead for hard times decides they don't want to deal with the consequences of their actions.
no i have to say i think this is a stupid plan. on paper it seems like a good idea..but the long and even short term results/ramifications are not so good.
once again..i am starting to believe in this country is you do the right thing, play by the rules, and follow through on your obligations...you get punished.
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