Mortgage assistance program of the Obama administration's already reaping many protests. Republicans think this program is the exercise futile. Democrats say the program is reckless.
President Barack Obama said that the government will disburse the funds of $ 1.5 billion for real estate agents in California, Arizona, Florida, Nevada and Michigan for the financial rescue, last week. Unemployed homeowners (borrowers who have more debt than the value of their homes) will be assisted with funds that will provide to local programs. Another option, the government will offer a second mortgage and pay the lender.
By reducing the credit rate to as low as 2% for 5 years and extend the loan terms for 40 years, this program is expected to reduce borrowers' monthly payments. In addition to a letter that documenting their financial difficulties, home owners must bring out proof of their earnings and make three payments to make the process complete.
However, experts have found during the initial phase of the trial that hundreds of borrowers have not qualified that cause they can not complete that process. Housing counselors have complained that many homeowners still stuck in limbo with no final word in the face of their application
Although Obama administration officials have said that this program is held to provide a second chance for homeowners during the boom of housing has given a bad loan. In fact, from 1 million registered since the launch of the program last March. Just 116,000 homeowners have completed the checkout process.
Phyllis Caldwell, head of the Department of Finance homeownership preservation office said that the purpose of the program is to help homeowners who have financial difficulties as challenges remain. According to Democrats, what has been done by the Ministry of Finance to provide more heat on the loan industry by reducing the borrower's, has been out of the way the principle of balance.
Many Americans invest for their homes in order to benefit thousands of bugs later, and they believe the government will help them save. But as Jordan said, in the end they will still face foreclosure.
Special treatment received by the borrowers in this program has caused problems as it has been recognized by treasury officials. This makes them have to work on new consumer protection to give time for 30 days for those who are rejected from that program to take appeal for the decision. They also protect homeowners who are being evaluated for assistance from lenders who will continue the foreclosure.
As reported yesterday by Reps. on Thursday. $ 15 million has been rolled out from the cost of $ 75 billion appropriated for this program. The program is considered a misuse of taxpayers' money by Jim Jordan, R-Ohio. and Darrell Issa, R-Calif. The people will remain in their homes instead to renting because of this program. This will cause distorted housing market.
By: Loan Section