Democrats unveil housing rescue plan
WASHINGTON - Homeowners buckling under their mortgage payments would be allowed to refinance into more affordable government-backed loans under a proposal introduced by House Democrats on Thursday.
The measure calls for the Federal Housing Administration to insure some $300 billion in new mortgages for distressed borrowers, even if they are badly behind on their payments and have poor credit. Lenders first would have to agree to wipe out a portion of the outstanding debt, and borrowers would have to show they could afford to make payments on the new mortgage.
There have been counless people facing their house being repossed that have contacted their lender and negotiated better rates and even some loan forgiveness. Don't get the government involved....they will screw it up for sure.
Many lenders offered these bad loans in cases where buyers should have taken FHA loans in the first place. But this generation of the mortgage business has almost no experience with FHA or VA loans, which are some of the best examples of our governments successful ability to introduce a public aid program.
And Merle B may want to look up the countless news stories about lenders failing to work out effective re-payment plans. In many cases, their hands are tied and/or it's just too onerous to renegotiate individual mortgages.
This proposal is finally headed in the right direction, in that it helps the homeowners rather than just the banks and developers.