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Foreclosure Aid Programs Hurting, Not Helping the Housing Recovery

January 18, 2011

The head of the House Financial Services Oversight Committee, Rep Randy Neugebauer, says the government needs to come to terms with the fact that the foreclosure prevention efforts are not working and in fact, are failing and prolonging the misery.  Now this is just an opinion, but I tend to agree with him.  These “financial Band-Aids” are probably slowing down the recovery of the housing market, by trying to help homeowners who should never have bought a house in the first place.  Honestly, who’s fault is that?  That they didn’t read the mortgage paperwork which stated that their interest rate was VARIABLE and was at some point going to increase from 1%?  I am sick of the blame game.  When you buy a home, it is an investment, and like any other investment, there is no guarantee that it will increase in value.  And just because you qualify for a loan doesn’t mean you should get one, EVEN IF THE BANK IS WILLING TO GIVE IT TO YOU!  Critical thinking was obviously in short supply when all the mortgages were being given out, and taken.  And look where it got us.  It was shockingly negligent that this was allowed to occur and that we actually got to this point.  But now that we are here: some foreclosures just have to happen.  You can try to modify a loan all you want, but if that person doesn’t have a job, they still won’t be able to pay their mortgage!  And that is where these foreclosure-prevention programs are failing.  They are modifying and changing terms for people that just aren’t qualified, or make enough money, to own a home.  In my opinion, it is time for this to stop.  The market will correct itself in time.

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