More gifts from the government for the financially irresponsible

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From Loren Steffy at the Houston Chronicle:

The plan calls for Fannie Mae and Freddie Mac, now under government control, to modify loans for its customers, which include more than 30 million mortgage holders.

Beginning Dec. 15, the government would reduce interest rates for homeowners who are at least three months behind on their mortgage payments and owe 90 percent or more than their home is worth. The interest rate would be cut so that they don’t have to pay more than 38 percent of their income for housing. Some mortgages also might be extended to 40 years from 30.

Did you get that? Get behind three months on your mortgage and have virtually no equity, and you get a gift thanks to Uncle Sam. You get to have a lower interest rate! And you might even get to lower your payments by stretching your mortgage out to 40 years.

Be responsible, and YOU GET NOTHING. Silly me… Since I bought my house four years ago, I’ve been working to build equity. What a dummy I am. Who knew if I paid as little as possible and skipped three payments, I’d be rewarded for my foolish behavior?

6 thoughts on “More gifts from the government for the financially irresponsible

  1. I should also point out that such a plan penalizes those who already took a loss when they sold their house (such as myself). You just Gotta love the government! Yay for moral hazard!

  2. Barbara

    Well, it seems this country is being run backwards and there is not turning it around any time soon. Lets see what other crazy things the gonernment will try before they realize it was a BAD idea.

  3. Tracy Coenen

    I know that “letting the market work” is so overused, but I’ve felt from the start of all this “bailout” talk that it would be the best move. Let the companies that made bad decisions go under. Let the strong companies buy up some of the weak/bad companies. Let homeowners find a way out of their financial issues. All of this to be done without a ton of money thrown at anyone who asks. Why? Because as a taxpayer who pays all her bills and has been ultra responsible, I can’t help but feel that I’m paying the price for everyone else who made risky choices and possibly were downright irresponsible. I did the right thing, but I’m the one who gets punished.

  4. resident

    Tracy, first off let me say thank you so much for all of your articles. I am scared senseless. My husband is a sales rep who has made minimal dollars this year (we owe more to the company that he works for than he has brought in – between all his dues, classes, etc.). Thank goodness he works a full-time day job. I also work two full-time jobs just to cover medications for my children (one of which has autism and the other one was sexually assaulted by a friend of hers). I had to pick up a third shift full-time position to cover all of the therapy bills for my daughter. It pains me to see all of these people who have not budgeted properly get ahead – while my husband and I have always had the attitude that if it took us two jobs to keep our heads above water we would do that. I watch a local family which you brought to light on this site for embezzling (get ahead – the woman committed suicide and her widower has really made out and seems to be getting more out of life than I do). I am to the point where I am ready to throw in the towel … sort of getting the attitude that you can’t beat ’em – join ’em. I watch this family enjoying their brand new boat, in the home that they got given to them at cost, hooking up their snowmobiles … every time you turn around he is looking for more handouts (and he gets them)! Yet his new fiance has a huge ring on her finger. I watch as people using government aid in front of me at the drug store get their medications paid for – and talk on their cell phones to their friends about rushing to the food pantry and then hitting the liquor store before it closes. This country is so messed up … I told my boss the other day maybe I’m the one that is screwed up – because I’m not jumping on the band wagon. We definitely are the country with the deep pockets ready to give to all of those people who either don’t hold jobs, cheat the system or just don’t care. I guess that is the American way … instead of doing what it takes (legally) – just beg for handouts.

  5. Haven’t you heard? It is time to spread the wealth. Just because you work hard and have the money to pay your mortgage, does not mean that everyone else wants to work just as hard. This is AMERICA! We have a right to everything, but we do not have an obligation to do anything! It is great. I love it.

    Oh yeah, don’t forget that there is also talk of lowering the mortgage balances down to the current homes values. Of course, this does not apply to rich fat cats who are lucky enough to have two or three jobs and are paying your mortgage on time.

    I am hoping with this whole auto-bailout that Uncle Sam will buy me a new truck too!

    Of course, I am joking with all of my comments. In reality, the whole thing makes me sick – and ashamed of our elected officials.

  6. Craig Hansen

    You’ve managed to live through the last 8 years, and you choose NOW to become ashamed of your elected officials?

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