Friday, February 06, 2009

Mortgage modification or "Mo Mod"

According to the New York Post:

In a nod to Main Street over Wall Street, sources familiar with the plan say Treasury Secretary Tim Geithner plans to allocate almost half of the remaining $350 billion in funds from the Trouble Asset Relief Program to the so-called "Mo Mod," or mortgage modification, platform....

The 21-day "Mo Mod" program works by structuring a new mortgage that more accurately reflects a home's worth so that a troubled borrower no longer owes more on their home than the property is worth.

Am I understanding this correctly? If you spent more on a home than you could afford and now you can't pay for it, the Obama Administration will re-write a lower mortgage for you?

But if you settled for a house that you could afford and have been faithfully making your payments, you are now are stuck with the mortgage to a house that is no longer worth what is was when you bought it. And your tax dollars get to help subsidize your neighbors with the new lower mortgage.

This is apparently how the Left views fairness! What is there to keep people from concluding that all they need to do is stop paying their mortgage payments so they too, can get a lower, refinanced mortgage?

I heard someone say that if Congress just divided up the stimulus package among every homeowner in America, each homeowner would get something like $17,000 in tax cuts. That would certainly be more fair than "Mo Mod" and might actually stimulate the economy. But then the politicians wouldn't get to control how the money was spent.

1 comment:

beachdude said...

Mortgage modification is a process whereby a home owner's mortgage is modified and both the lender and homeowner are bound by the new terms of the new mortgage.

The most common loan modifications are listed below:

lowering the mortgage interest rate
reducing the mortgage principal balance
fixing adjustable interest rates within the mortgage
increasing the loan term throughout the mortgage
forgiveness of payment defaults and fees
or any combination of the above

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