Tuesday, March 3, 2009

What Are We Gonna Do?

by D. Babbs

It’s no big secret – The US housing market is suffering and those with mortgages are feeling the effects. I have heard numerous people say if they had millions of dollars, they would buy up the increasing number of foreclosed homes to capture the decline in the value of houses. But does anyone say they will help out those individuals who cannot make mortgages payments and may lose their homes.

Well, there is help. CitiMortgage recently announced short term relief for unemployed homeowners. Unemployed homeowners may be eligible to have their mortgages temporarily reduced to $500 a month if their homes are financed through CitiMortgage. Borrowers are covered by the program for 90 days when they submit documents proving they are recent recipients of state unemployment benefits. According to CitiMortgage’s president, this program was designed to keep the neediest borrowers in their homes.

Mr. Obama also has some solutions to this foreclosure crisis but the question on everyone’s mind is will it help those who really need the help. Obama’s foreclosure prevention program seeks to help “responsible” homeowners and those at risk of default. Homeowners with little or no home equity may be able to advantage of lower interest rates. However the lower interest rates do nothing for individuals who expected their homes to recover their value. The program also does not benefit unemployed homeowners since they cannot afford housing payments, regardless of the lower interest rates. Many of his plans seek to help those who have already stopped making payments. So should people not pay their mortgage to receive help? Who wants to purposely harm their credit score?

There is no clear solution for this housing crisis so I continually ask the question, “What Are We Gonna Do?”




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