[quote=briansd1][quote=Jacarandoso]
Will it cost more to finance/refinance people who are not underwater, and can go full doc’s, than it does for these newly rescued upside down borrowers who get weakened underwriting standards?[/quote]
That’s besides the point. It’s not a question of “deserving” or not, but a question of getting the economy growing.
If we automatically give underwater homeowners the lowest rates, we greatly improve their incentives to stay in their homes. If they walk, the housing crisis will continue on. 1/3 of San Diego homeowners with mortgages are underwater.
The mortgage crisis is our Greece problem. We need to swallow the bitter pill and do what’s best for the economy as a whole.[/quote]
This is what I’m having trouble understanding. Obama was in Vegas announcing this new plan. Homes there are easily 50% off peak. Say you are one of the few people who didn’t succumb and walk away over the past few years, were lucky enough to keep your job and made payments, but you’re still 40 to 50% upside-down, I just don’t see how refinancing to 4% is going to help you much. You are still paying on a very overpriced home.
Seems to me they are trying to make sure you continue to be a mortgage slave. People in Vegas may be waiting quite a while to see peak prices come back again. Let’s face it. There’s even places in SD that are looking at 30% off peak. And, of course, this plan probably isn’t going to help investors and those buying back then to flip and/or people w/second homes. This plan is a little late, if you ask me. Quite a few people strategically defaulted and many have missed a payment of the past year, much less 6 months of not being late.
