QUESTIONS AND ANSWERS CONCERNING THE RELIEF PLAN IS HERE -
CONCERNS ABOUT THE PLAN:
1a. In the past, lenders did not really modify a loan. They put late fees, attorney fees, late payments, past due interest, etc. on the back end of the so-called modified loan. This has to stop, and any modifications that were done that way, should be re-modified.
-
1b. The mortgagor many times has no idea who to talk to, who holds his paper, and is therefore placed at a disadvantage in any negotiation (given there is negotiation). As Prime Minister Gordon Brown has stated, a lot of these mortgage backed securities were sold in Europe and in other countries. The President, I don't believe, has addressed this problem.
-
2. I have concerns about homeowners slipping back into delinquency. The problem ... no emergency funds for repairs to homes or other kinds of emergencies ... like auto repairs.
-
3. The budget formulas used by the government, and financial institutions are not realistic (not by any stretch of the imagination).
4. Is the President going to tackle minimum wage? Currently low and moderate income individuals and families are not earning enough money; that is why credit cards were used or refinancing was used in order to help pay for groceries, auto insurance, health insurance, car repairs, home repairs, etc. etc.
Those financial vehicles are no longer available to a great many. It's a good thing and a bad thing; because, we all should have been living within our means ... however, again, like I said before, there's not enough income available for what a family or individual needs.
-
5. For those people who are low-income earners, the State or Federal government needs to continue providing free roof, plumbing and structural repairs for a certain period of time. The States used to have conservation programs, free plumbing and roof repairs (based on income) ... what happened to those programs?
6. I would also like (as a condition for qualifying under the Homeowner Affordability and Stability Plan), a stipulation that says, in order to qualify the person has to agree to have money withdrawn from his/her paycheck or social security check, etc. to be set aside in a savings vehicle (of their choice).
-
That money would be an emergency fund and could not be touched for at least 2-4 years or until there was a significant amount of money set aside for emergencies. This prevents the homeowner from slipping back into delinquency.
-
7. Next you need to put a cap on how much credit an individual (who takes part in the program) can apply for in the future (at least until they have enough money built up in an emergency fund, or their income increases). A notation would be placed on their credit report which would alert lenders, and prevent the borrower from accessing credit over and above a stipulated amount.
-
8. The President forgot a vulnerable, but significant group of people … seniors (60+).
-
Many seniors wish to continue living in the homes; however, some were duped into refinancing their homes at 100% LTV or had to refinance in order to maintain their home (roof/plumbing or other structural repairs). These seniors are on a fixed income with property taxes, energy costs, etc. skyrocketing.
-
Many seniors cannot move due to limited affordable rental units, etc. What special mortgage programs and supportive services are there for this group?
------------------------------------------------------------
This whole thing about living within one's means ... wake up and smell the coffee ... the average low income and moderate income family and individual doesn't earn enough money even for basic necessities and cannot save for emergencies. Forget about health care, dental, auto, homeowners or life insurance.
-----------------
-
I recently looked at the Economic Recovery Plan. I am hopeful ... and it is a good start [just doesn't address my above concerns]. So all in all, the President is progressing well with his comprehensive program. He does have an unprecedented amount of issues, etc. on his plate. I wish him well.
-
Read about the ER Plan by clicking the following link:
-
Posts
