"The Treasury program has decided to tackle the delinquent mortgage problem by reducing the interest rate on eligible borrowers’ loans to a level that makes monthly payments affordable. Her research shows, for instance, that 70 percent of modifications involving only interest rate cuts, rather than reductions in the principal borrowers owe, have failed after 12 months." People are just falling right back into default because the plan is ineffective. Something needs to be done or else homeowners will continue to foreclose and the real estate market will continue to suffer.
Sunday, December 6, 2009
Why Treasury Needs a Plan B for Mortgages
In this New York Times article, the failing job of the Treasury's plan to help homeowners change their mortgage terms is discussed. The Home Affordable Modification Program put in place ten months ago has done nothing that it is supposed to do and the Treasury points a finger at big institutions who are failing to do what they are supposed. The program is not working to help ailing homeowners with their mortgages and need to come up with a plan that is actually effective. According to a senior managing director and head of mortgage strategy at Amherst Securities Group,
Subscribe to:
Post Comments (Atom)
1 comment:
I have mixed feelings about this article. On one hand, I agree that it is frustrating when plans don't work the way they're supposed to. It seems pointless to pour money into a program that does little to help people in the long-run. But on the other hand, I have a hard time feeling bad for people who have been living beyond their means. There is only so much the government can do to help people, and then they have to help themselves. I think it will be interesting to see what the resolution is to this problem.
Post a Comment