"While still voluntary, the program contains a mix of carrots and sticks for mortgage servicers and investors, both of whom have been seen as resistant to modifying loans. The program would not only give servicers $1,000 for each modification, but would give them another $1,000 a year for three years if the borrower stays current. It will also give $500 to servicers and $1,500 to mortgage holders if they modify at-risk loans before the borrower falls behind." ( "Obama: Aid 9 million homeowners", Tami Luhby, CNNMoney.com senior writer)
An interesting cash incentive to loan providers to help out the average hard working American home-owner. I found this artical to be an easy to understand lay out of a very intriguing plan. It also laid out a part of the plan that included changing the bankruptcy law to include allowing judges to change and adjust mortgage loans. I think Obama is providing step by step, however small they may be, beneficial changes to the country to allow the government to help save us in our weak economic state, rather than smother us into personal financial failure.
2 comments:
I think that this is a very good idea because it makes lenders more likely to help homeowners restructure their mortgages. The idea of changing the bankrupcy law is also good, if it allows fewer homes to go into foreclosure. However, with the amount of money the government is putting into the banks, they should already be trying to fix the problems and restructing these loans. The last thing we need is more foreclosures for people who could make payments if their terms were changed to be more favorable. Personally, I feel that the big banks are largely responsible for this crisis, yet they are only making minimal steps to get us out of this crisis.
Hmm, agreed. A direct financial incentive for each adjusted morgage is almost begging for them to make some changes, when in fact, you're right about the fact that they indeed are already recieving plenty of government aid. Perhaps some people, such as the big banks and the people in charge of such institutions aren't feeling the financial crisis as harshly as the rest of the world.
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