Governmental tax-subsidized mandatory mortgage bailouts are fair because the alternatives would be inconceivable – homelessness and displacement. What should not be excused are any refinances done solely for the benefit of incurring further credit by the homeowner. Funds made available by states to help homeowners who cannot otherwise pay their mortgages are a good idea for the simple reason that so many other programs are already held in existence such as FHA (government backed home loans), VA (veterans), as well as low income programs such as Habitat for Humanity or Section 8.
Owning a home is the American dream. Many families have special needs or may have many extended family members which make apartment or rental-home living a difficult option. The family would like to know that their hard-earned money is building equity so that they have a certain amount of security. It would be horribly unfair for a family to have paid a rather large down-payment and several years of mortgage payments, only to see their “nest” – egg literally be pulled out from under them due to a missed payment or two.
Many times it may be the lenders, bankers or lawyers who have convoluted the finance contract to the point that the homeowner was unaware of baloon payments or increased interest. There are many who are caught off-guard due to mortgage insurance rates which are required and then provided by the lender if the homeowners have not provided their own coverage. These costs are added to the initial mortgage increasing the costs. Taxes are always variable as well and if not included along with the mortgage can come as an unpleasant surprise at year’s end.
If the mortgagees have been laid off from work or had a death in the family, it would be hoped that some kind of insurance would help them through like credit life policies do for major credit cards and car financing. Unemployment insurance and disability pay a small portion of what the worker had been previously earning, therefore, the little amount they get must be used for heat and food before anything else. Unfortunately creditors cannot be expected to know your own specific personal financial situation at the time of threats of foreclosure, so it is always a good idea to write to the lender explaining how and when a payment can be made. There are also outside agencies who can help restructure debt and help be a go-between to help pay the bills.
Homeowners are asked to live within their means, but have you seen the “means” lately? The average cost of a home today is outrageous and both husband and wife will literally have to be employed full-time at a good salary to pay any kind of mortgage. Once children are enrolled into a school system, they should not have to pay the consequence of being moved unnecessarily and displaced. The parents, however, may want to reconsider their choice of private school tuitions, after-school activities and multiple vehicles to transport the kids and themselves due to the high cost of gas. They can look to alternative heating and government assisted insulation programs for the home. They might want to consider starting a part-time job from the home or by internet even if merely consulting.
Those who pay their mortgages faithfully every month are probably people who have been helped by others somewhere along the line too. They may be folks who bought their homes at a time when interest rates were lower and down payments were not required. That 20 percent down guideline of yesteryear would be a lot more today, when you consider the cost of a newly built home is probably ten times the cost of what a home was just 25 years ago. Remember too, it is the high number of foreclosures and bad bank-loans that are causing the real estate market to suffer which means the equity and appraisal of your home depends upon the integrity of those who own homes around you.