Wanna know why we are in the trouble we’re in right now? People spent too much money. Many times, money they didn’t even have. They either bought a house they had no business buying or they refinanced that house and spent the money somewhere else.
Either way, we simply spent too much money.
And the only way that we are going to be able to get better is to let this thing play out. The over spending, and the bubble that it created, has GOT to play out, and get out, of the system. Pure and simple.
Which makes me shake my head when I read this:
Under the program, eligible borrowers who are behind or at risk of default can have their mortgage interest rate reduced to as low as 2 percent for five years. They are given temporary modifications, which are supposed to become permanent after borrowers make three payments on time and complete necessary paperwork, including proof of income and a hardship letter.
See, the Government has set up a program that allows folks who are in trouble with their mortgage to get help. Ignore, for a second if you can, the fact that the government has no business stepping and helping these people. Focus instead on if the program works or not:
Only one in three homeowners who have signed up for the Obama administration’s mortgage relief plan have sent back the necessary paperwork, highlighting continuing problems for the government’s effort to stem the foreclosure crisis.
It doesn’t. And how could it?
Lenders, however, say the majority of borrowers either don’t complete the paperwork or don’t make the payments. At Bank of America, for example, only a quarter of the 65,000 borrowers in trial modifications have sent back their paperwork.
The bank blamed “ineffective communications with customers, shortcomings in document maintenance, misunderstandings about program requirements, and the inability to comply by some borrowers,” according to written remarks from Jack Schakett, Bank of America’s credit loss mitigation strategies executive.
I mean seriously. Can you imagine going to the DMV for help on your mortgage? Can you imagine the confusion that must reign at these offices?