Another Poorly Thought-Out Plan

Another bail-out plan approved June 23, 2010 by the ObamaAdministration, the "Keep Your Home" program. California will receive$699.6 million to "work with lenders" to make principal reductions.Under the new program, there will be a $50,000 cap on principalforgiveness.

Since property values in Riverside County havedropped 50-60% that leaves the majority of homeowners more than $50,000underwater. But wait! The state will be asking lenders to 'MATCH" theamount the state spends on principal reduction - dollar for dollar!

Thebiggest obstacle I see with this is the success of this program willdepend on the cooperation of the lending industry.

Let's look atthe rest of the bail-out plan. 1.5 billion will be given in all to fivestates; California, Arizonia, Michigan, Nevada, and Florida. Each statewill use their portion of this money differently.

As forCalifornia, it will use its money for principal reduction, mortgagereinstatement, unemployment mortgage assistance, and when all else failsTransition Assistance which is actually a HAFA Short Sale with aone-time payment of up to $5,000 to relocate.

The plan is to takeeffect before November 1, 2010. Hummm, that will give the banks plentyof time to come up with a plan of their own.




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Comments

  • The program is also voluntarily so they will help who they want without risking a lot. Just because their is a cap does not mean they will try to get their. 50,000 maybe 25,000
  • Well, that's exactly what was said in his campaign. "We have to spread the wealth around" Sounds like Socialism to me. Sure doesn't sound like the land of opportunity anymore.
  • John Doe Tax Payer.....get ready to pay up. Take from the haves and just give to the have nots. I have a client who is from Romania and he told me today, he is thinking of gonig back to Romania because America is becoming more and more communist by the day an we don't even see it happening.

    He and I got to discussing this and he said something that just blew me away. He said unions and bail outs to destroy the economy is the biggest hurdle communist have and once they accomplish a collapse of the economy, they take over.

    We have got to stop the madness.
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