After signing Legislation at the Denver Museum today...

[Damocles]

http://abcnews.go.com/GMA/story?id=6886824&page=1

Obama is on his way to unveil the package that aims to reduce mortgages to 31% of a home owner's earnings.

Example:

If you make 50,000 per year you are usually paying about 20K in mortgage (averages here folks) this would reduce that to 15,500.

The law would only be for mortgages closed before the law takes effect.

In addition the law would allow bankruptcy judges to alter mortgages and you would be required to inform your mortgage holder before your intention to file bankruptcy.

...

It looks interesting.

 

[Annie]

http://abcnews.go.com/GMA/story?id=6886824&page=1

Obama is on his way to unveil the package that aims to reduce mortgages to 31% of a home owner's earnings.

Example:

If you make 50,000 per year you are usually paying about 20K in mortgage (averages here folks) this would reduce that to 15,500.

The law would only be for mortgages closed before the law takes effect.

In addition the law would allow bankruptcy judges to alter mortgages and you would be required to inform your mortgage holder before your intention to file bankruptcy.

...

It looks interesting.

That might help. In fact it's that kind of 'stimulus' that might get things going again, along with actual job creation. I'm just concerned the welfare and job creation do not go hand-in-hand, whether to banks or individuals.

 

[Damocles]

I'm amazed at how the same companies, if they got money from the feds to dig holes, that received "corporate welfare" are now going to get money that isn't "corporate welfare" and it is called "the new green economy" rather than "corporate welfare"....

However, this will actually give people who will spend the money, some money to spend and not just once.

 

[Immanuel]

From what I read here, this is a terrible plan.

So banks whom we just gave billions of dollars to in order to keep them from collapsing are now going to be ordered to write off potential billions of dollars of assets?

Disclaimer here: it does not appear that my mortgage would be affected here as my mortgage payment is not over 31% of my household income unless we are talking taxable income. I also would not begrudge people who are in such a situation of receiving help.

However, I just don't see how this plan is fair to lenders.

Lenders would also be required to write down a mortgage principal rather than interest rates, with the goal of helping to reduce the chances of default.

The plan would also allow bankruptcy judges to modify mortgages, but only mortgages closed before the law is enacted are eligible.

Homeowners would also need to inform their lender or loan servicer in advance of their intention to file for bankruptcy protection.

Critics say the plan will push up interest rates on all future mortgages, even for people with excellent credit, and could create more losses for banks.

I realize most people don't care about corporate profits, but those are businesses that keep our economy flowing and now they are going to insist that the corporations write of billions of dollars every year?

Maybe if they required the corporations to tack on the principle to the end of the loan, but sure as heck not for them to write it off.

Immie