Mortgage Rates News

Doesn't this seem like the govt. is paying the mortgage lenders to lower your payments?

So basically if you agreed to a stupid mortgage the govt. will now pay your mortgage company in exchange for modifying your loan. Why would anyone try to buy things they can afford if the govt. is just going to cover the difference when you spend too much?? http://news.yahoo.com/s/bw/20090501/bs_bw/apr2009pi20090428324133;_ylt=AvXOXQOUevxk9jam4Y85o6dg.3QA;_ylu=X3oDMTE2N2kwcW8xBHBvcwMxBHNlYwN5bi1yLWItbGVmdARzbGsDZXYtb2JhbWFleHBh The new plan aims to get rid of that roadblock, Administration officials said. "With these latest program details, we're offering even more opportunities for borrowers to make their homes affordable under the administration's housing plan," Treasury Secretary Timothy Geithner said in a statement. $500 Up Front The Administration's initiative, funded out of $50 billion in financial rescue money, relies on a series of payments to mortgage companies as an incentive to modify second loans at lower interest rates. Mortgage companies would get $500 up front for each modified loan, plus $250 a year for three years as long as the borrower doesn't default. Borrowers would get up to $1,000 over five years applied to the principal balance of their primary mortgage, and the government would pick up part of investors' costs as well. Lenders would also be given the ability to remove second mortgages entirely in exchange for larger government payouts. The Administration also plans to give mortgage companies $2,500 payments to entice them to participate in the "Hope for Homeowners" program. It was launched by the government last fall but so far has been a failure, proving unattractive to banks required to absorb large losses. The program was supposed to allow 400,000 troubled homeowners to swap risky loans for traditional 30-year fixed-rate mortgages with lower rates. Instead, only a handful of borrowers have been able to qualify, and as of earlier this spring only one loan had completed the program.

Public Comments

1. "The Administration also plans to give mortgage companies $2,500 payments to entice them to participate in the "Hope for Homeowners" program. It was launched by the government last fall but so far has been a failure, proving unattractive to banks required to absorb large losses" > Isn't this the type of thing that got us into this mess in the first place? So what has been learned..Nothing? Encouraging bad behavior encourages more of the same right? What a mess!
2. lets face the facts of life.we just voted the wrong ppl in office.