The “Making Home Affordable Plan”

So, let me get the straight. Those who are close to defaulting on their mortgages (and also those who have defaulted?) can get their mortgage interest rates reduced to a set percentage of their income. “The Treasury Department” would subsibize this:

For a loan modification, lenders would have to reduce the mortgage payments to no more than 38 percent of the borrower’s income. The Treasury Department would share the cost for lenders to cut that debt-to-income ratio to 31 percent. (link)

Since I’m not about to default, I can’t take advantage of this. So I pay the same as always because I have acted responsibly and made adjustments as necessary to meet my obligations. But those who haven’t get a discounted mortgage and a partial subsidy from the government.

Of course, “The Treasury Department” has no money with which to “share the cost”. They can only spend what they have collected or plan on collecting in taxes, or what they print (and if they print too much, it’s inflation, and the dollars we have are worth even less). And since our government really doesn’t have a surplus of collected taxes, they will borrow money and pay interest on it to fund this.

I don’t really want to pay a percentage of someone else’s mortgage.

And I really don’t want to pay interest for the privilege of paying for a percentage of someone else’s mortgage.

This is a dreadful idea.

One thought on “The “Making Home Affordable Plan””

  1. This whole Making Home Affordable has aroused both my interest and doubt. On one hand, it seems like a pretty good idea. So many homes are in doom of foreclosure that America does need a plan to keep people in their homes. I mean, come on, nobody wants to get kicked out of their homes and end up in a tent city, right? Then again, sometimes the idea seems fishy to me. The way you said it, you paying a percentage of someone else’s mortgage, is pretty unfair.

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