Wall Street, banks, even car companies got faster help from the government in the form of one bailout or another, than did the average homeowner in this country. And, now that “help” is at hand, the real question to ask is: will it do any good?
President Obama has now revealed his much anticipated “lifeline” to those facing foreclosure…a $75 billion one at that.
Obama made it a point to say that his plan will not help every homeowner–which may end up being one of the bigger understatements from his young administration to date.
A lot depends on the willingness of various lending institutions to agree to mortgage adjustments and some of it depends on the hope –Obama’s that is–that bankruptcy laws will be changed to allow judges to modify mortgages on the brink of disaster.
To a large degree, the plan is aimed at those who owe more than their houses are actually worth. Moody’s Economy says of the 52 million some odd homemakers with mortgages, some 27 percent now fall into this category–roughly 14 million!–this according to an Associated Press dispatch.
But what about those who played by the rules, are paying their mortgages and yet feel it only fair that they, too, be allowed to trade downward, if you will? The picture is far less clear what will happen to these folks?
And, without a change in the bankruptcy laws, not a sure thing by any measure, there may be no way to force investors who actually own many mortgages nowadays to relax their grip on the homeowners’ pocketbook.
Some critics argue that 75 billion isn’t even nearly enough, especially when you consider how much, much more the government (taxpayers) has already given to help Wall Street fat cats and car company CEOs.
The worse part is, it is likely to take the various agencies and potential participants weeks…maybe months…of study before they really have a clue what is now expected of them. And, as we all by now know, time is not on our side anymore.
Photo Credit: Mike Licht