No Mortgage Relief Again

The Obama administration will soon announce it hs reworked its struggling mortgage relief program suggesting that lenders slash the total amount owed. I cannot understand how government can step into a contract they are not a party to and cause the owner to change the amount borrowed so borrowers benefit.

I understand that their might be something someone can do, but it is not fair to the banks. Consumer advocates have been calling on the government to help the roughly 1 in 3 homeowners who owe more on their mortgage than the home is worth.

We all know of the piggyback loans which allowed buyers to purchase homes will little down. The banks were encouraged to lend to those who were poor credit risks and to even investors who could not make it if the market turned.

The Obama administration is offering piggyback lenders incentives to lower payments on the second mortgage. But no one signed on to the program until Bank of America did on Tuesday.

The problem is not the second but the increase of interest rate on the first and the down turn of the individuals income. I cannot see how this will really help those in trouble.

Tim Lorenz

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Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!