Off The Cuff

Want A Catch 22? Buy A House

Posted by: From Arkansas in Are You Kidding Me?, Give Me A Break, Shame of America on Aug 31 2007

Welcome back!

Things are going from bad to worse, it seems. A couple of years ago or so, folks were jumping on the teaser loan bandwagon. At the time, it seemed like a good idea. Interest rates were low, payments equally low so buy a house and enjoy the plan. Ah, but now, the interest rates are going up so the homeowner gets to deal with the higher payments that they cannot afford. Because of that, many folks are learning that the teaser loans are biting in the behind and losing their homes. If that was not bad enough, the lending companies put in a little note that states that if you want to pay off the loan, like many would right now since it would be a plus not to have that big payment staring you in the fact every month, you get to pay, pay, pay a penalty.

See, I don’t know a whole lot about this subject but I do understand here that the poor sap that bought the house with that type of loan is now wishing he had never heard of the loan. He is wishing he had gone with the higher payment plan because it would be stable right now instead of bouncing ever higher each year. He’s probably beating his head against a wall because he can’t get out from under this mess since he would be paying through the nose in penalties to do it. Okay, so he refinances, right? Not if his credit is damaged from this, he won’t. Lenders are being much more strict with these loans now that they have drained the folks dry. If someone’s credit is now bad, they likely won’t touch it or if they do, they will be loaning at a much higher interest rate. Welcome to the catch 22 hour. “Let’s just see how many people we can screw today,” so say the lenders.

In walks the federal government who says that they can bail out the homeowners in distress. Ah but it’s selective. They will be able to bail out those who still have amazingly good credit. The poor sap that has crappy credit now is out on his patoot. The government will not bail out people who are facing foreclosure. DUH!! Seems to me that these are the very people who need it the most!! Oh and the government says that this is NOT a bail out. What is it then?

Anyway, the federal help will be for those who’s credit is still good. Those folks will get refinancing. The rest of the people who got into this mess can, obviously, find their own ways out of it or lose their homes.

From somebody who really has not a whole lot of knowledge about this sort of thing since I have never been able to qualify for a home loan yet due to bad credit…because of MEDICAL BILLS, even I can see that this is not helping the people who need it the most. This is going to help some folks and that’s great. I would venture to say that it will BAIL OUT a lot of people but it will not help the vast majority that got into this when times were good a couple years ago.

Frankly, this is yet another case of the SHAME OF AMERICA popping up to bite somebody. To the lenders who knowingly put people into this mess. To the federal government for not getting on this a whole lot sooner with some regulations about such stupid loans in the first place. I have tried to believe that this administration was doing the best for as many as possible but things are simply not adding up anymore. I have so many WHY’s that it isn’t funny. So, I will simply state that I will watch and see what happens.

If you enjoyed this post, make sure you subscribe to my RSS feed!