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Another day, another day of government lies. Today was no different. When I saw this headline, I knew already it was misleading. But I gave it the benefit of my now insurmountable doubt and went in to read the latest lie our government bestows upon us every day. This one hearkens me back to the term “sweeping” financial reform, or “historic” Healthcare ”reform.” False hope packaged and wrapped up with nicely titled bow intended to mislead and offer nothing they promise.
http://realestate.aol.com/article/experian/_a/underwater-borrowers-get-a-lifeline-on-september-7/201009020001
For your loan to qualify, you must meet these conditions:
- Your mortgage must be in a negative equity position.
- You must be current on your mortgage to be refinanced.
- You must occupy the subject property (one to four units) as your primary residence.
- You must qualify for the new loan under standard FHA underwriting and your FICO score must be greater than or equal to 500.
- Your existing loan must not be an FHA-insured loan.
- The existing first lien-holder must write off at least 10 percent of the unpaid principal balance.
- The refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent.
- If you have other subordinate mortgages (such as an equity line) they must be re-subordinated and the new loan may not have a combined loan-to-value ratio greater than 115 percent.
- Your total monthly mortgage payment, including the first and any subordinate mortgage(s), cannot be greater than 31 percent of gross monthly income. And total debt, including all recurring debts, cannot be greater than 50 percent of gross monthly income.
- You cannot use the new FHA mortgage to pay off existing debt obligations in order to qualify for the new loan.
http://www.doctorhousingbubble.com/fha-insured-loans-fannie-mae-freddie-mac-loan-market-dominated-by-fha/
For the first quarter of 2010, FHA insured loans backed $52.5 billion in home mortgages while Fannie Mae and Freddie Mac combined backed $46 billion. This made up 95% of the entire mortgage market. So much for banks lending out their “own” money (which is our bailout money)…
So…if you have an FHA insured loan, you won’t qualify. Forget all the other exclusionary requirements for this “lifeline”…95% won’t qualify on this one alone!!
- Your total monthly mortgage payment, including the first and any subordinate mortgage(s), cannot be greater than 31 percent of gross monthly income. And total debt, including all recurring debts, cannot be greater than 50 percent of gross monthly income.
Yeah…now we’re at 100% won’t qualify. Even without these disqualifying requirements, no one could use this “lifeline”…just another program that is predicated on voluntary bank participation, and negative incentive for them to do so:
To encourage second lien-holders to participate and extinguish fully or partially any second lien, the existing second lien-servicer will be entitled to a onetime incentive of $500 for each successful closing. There also will be an incentive for investors, based on the combined loan-to-value of the existing lien, and all senior liens associated with the mortgage.
Hopefully, these incentives will be enough to encourage your lender to participate.
This poor author who has written more than 25 books appears to thrive on false hope. If banks are not required to participate, are incented by giving them $500 to write down 10% of unpaid principle balance…or extinguish second liens…IT WILL NOT HAPPEN! When are people going to realize every single headline that suggests this administration is doing anything to help stave off foreclosures is a blatant lie. It is downright cruel to promise help when program content clearly shows none exists.
The question is...why? What is the Obama Administrations’ goal in purposefully ignoring the single biggest threat to our overall economy…over and over again? Could it be that their goals are different from the welfare of the American people? It certainly looks like it to me.
This isn’t a“Lifeline”…it’s a noose, getting tighter every day. As I’ve said before many times, there is nothing worse than false hope, but our Government is employing it as a cornerstone of their agenda. Whether it is the foreclosure crisis, financial “reform,” or Healthcare “reform”, Americans (who haven’t already experienced it) are getting set up for a whole big bad bowl of disappointment…dumping more fuel on an already stoked and angry fire.
