The Bailout and My Mortgage
Have you been seeing more foreclosures in your neighborhood than ever before? We’re definitely not surprised if you have been. While the US is currently climbing its way out a recession-like stock market, the housing market is suffering greatly, almost nationwide.
It varies by city and state, but some homeowner’s houses have gone completely upside down, leaving them with homes that are valued way below what the consumer has paid for. Mortgage foreclosures are at an all time high right now, and experts predict that billions of dollars will have been lost through these rocky financial times.
Recently, the government stepped in and decided it was time for them to do something about our suffering economy, including the housing market. But the main question on a lot of American’s minds is, really how much is it going to help?
Unfortunately, this bailout plan is pretty limited. It certainly won’t help everyone out, but how could we expect it to? The bailout plan is designed to freeze the borrower’s mortgage for up to 5 years. This helps keep the interest rate on the mortgage down for a period of time, so the homeowner can get their financial situation under control. This may include applying for new jobs, putting a personal budget in place, or taking advantage of various debt relief options.
Sadly, there are quite a few limitations on who this bailout applies to. First off, it only applies to consumers that have less than 3% equity on their home. They must also not be more than 60 days behind on their payments, which really doesn’t help individuals who are the brink of foreclosure.
In addition to the qualifications listed above, the homeowner must also prove that they couldn’t afford an increased interest rate, by going through a lengthy paperwork process. Not to mention, the government bailout plan only applies to sub-prime mortgages, leaving many people to suffer alone with their prime mortgages. Overall, the bailout really gives the cold shoulder to many consumers.
One of the worst problems about the bailout efforts by the government is the fact that it only delays the inevitable. Most homeowners are so far into debt; their home is only one of their worries. If they can’t pay for their car, credit card and medical bills, they’ll never be able to cover those and their mortgage, even in the long run.
We also feel that it’s unfair to go back and help the people that made bad decisions in the past, since subprime lending originally encouraged many consumers to try and buy houses they couldn’t really afford. Now, the homeowners that made the right decision, but are still facing financial trouble, aren’t even getting the help they deserve.
While the bailout efforts have certainly helped some homeowners, if you’re currently unable to pay your mortgage, and nothing will be changing for you financially in the immediate future, you’re more than likely going to be losing your home to foreclosure. It may be time to start preparing for the worst, possibly even bankruptcy. It would be in your best interest to speak to a financial advisor before making any brash decisions though.
It varies by city and state, but some homeowner’s houses have gone completely upside down, leaving them with homes that are valued way below what the consumer has paid for. Mortgage foreclosures are at an all time high right now, and experts predict that billions of dollars will have been lost through these rocky financial times.
Recently, the government stepped in and decided it was time for them to do something about our suffering economy, including the housing market. But the main question on a lot of American’s minds is, really how much is it going to help?
Unfortunately, this bailout plan is pretty limited. It certainly won’t help everyone out, but how could we expect it to? The bailout plan is designed to freeze the borrower’s mortgage for up to 5 years. This helps keep the interest rate on the mortgage down for a period of time, so the homeowner can get their financial situation under control. This may include applying for new jobs, putting a personal budget in place, or taking advantage of various debt relief options.
Sadly, there are quite a few limitations on who this bailout applies to. First off, it only applies to consumers that have less than 3% equity on their home. They must also not be more than 60 days behind on their payments, which really doesn’t help individuals who are the brink of foreclosure.
In addition to the qualifications listed above, the homeowner must also prove that they couldn’t afford an increased interest rate, by going through a lengthy paperwork process. Not to mention, the government bailout plan only applies to sub-prime mortgages, leaving many people to suffer alone with their prime mortgages. Overall, the bailout really gives the cold shoulder to many consumers.
One of the worst problems about the bailout efforts by the government is the fact that it only delays the inevitable. Most homeowners are so far into debt; their home is only one of their worries. If they can’t pay for their car, credit card and medical bills, they’ll never be able to cover those and their mortgage, even in the long run.
We also feel that it’s unfair to go back and help the people that made bad decisions in the past, since subprime lending originally encouraged many consumers to try and buy houses they couldn’t really afford. Now, the homeowners that made the right decision, but are still facing financial trouble, aren’t even getting the help they deserve.
While the bailout efforts have certainly helped some homeowners, if you’re currently unable to pay your mortgage, and nothing will be changing for you financially in the immediate future, you’re more than likely going to be losing your home to foreclosure. It may be time to start preparing for the worst, possibly even bankruptcy. It would be in your best interest to speak to a financial advisor before making any brash decisions though.
