Obama's Mortgage Rescue Plan Is a Joke

Some 20 million homeowners currently own homes worth less than their mortgages. The first stage of Obama's "Making Home Affordable Plan" allowed borrowers to get a loan for up to 105% of their homes value. According to the Treasury Department a whopping 20,000 loans have been refinanced so far. A whole 105%? Are you kidding me? Who does that help? People who bought a home last week.

Last month the limit was raised to 125%, which is better, but most people are down 50% from the value they bought their homes for, according to Zillow.com, a real estate Web site. More than one in five borrowers are currently underwater. A 125% loan value helps, but it's really nothing. And with interest rates back up - again who does that help?

Now the White House wants 500,000 trial loan modifications by November. Get me a chair I think of going to fall down. Wait I am sitting down. Put a cushion underneath me. 500,000 out of 20 million. Wow!

So first, $20,000 homes have been re-financed. Second, 500,000 loan modifications can be expected by November. This is a drop in the bucket. Hello, 20 million homes are upside down. Helping 520,000 home is better nothing, but again 20 million homes.

Well, hold on a second, the Obama administration says it is on pace to help up to four million homeowners over the next three years. Four million is a step in the direction, but 3 years. The world is going to be over in 2012 for sure. Not by a natural disaster, but there is going to mass chaos.

More and more people are trying what we call "Buy and Bail". Where borrowers by a bigger and better home and let their upside down home go into foreclosure. Thus ruining their credit for years and adding more foreclosures to the mix. Also, the number of people falling behind on their payments continues to grow. Especially, now as unemployment continues to rise. An additional 1.5 million homeowners fell into foreclosure in the first half of 2009, up 15% from a year ago.

One woman from Michigan wrote, "Obama's plan is a joke. The banks are a joke, fax, fax, fax, call, call, call and no response for months. Even Washington rep can't get an answer or help, what a sham!!!" A friend of mine got her house payment modified. The bank forgave the late payments, but didn't change her house payments. The payments really needed to be lowered. She will probably end up late again.

If this is a joke I don't think anyone is going to be laughing if we don't pick up the pace soon.