Homes need to be occupied.
That is the bottom line.
Today’s housing market needs a dramatic overhaul and it’s been long overdue for a fix. So we don’t have the time to be contemplating moral hazards anymore.
So I’m OK with President Obama extending mortgage assistance to owners of multiple homes.
According to Bloomberg, the administration will open up the Home Affordable Modification Plan, or HAMP, to these additional borrowers starting in May.
Borrowers who qualify for HAMP can have their monthly payments reduced through lower interest rates, longer mortgage terms and forgiven principal.
Landlords can apply for loan modifications for up to 4 mortgages as long as they rent out the homes or plan fill them, according to Bloomberg, who says about 700,000 landlords might qualify.
This has angered some, who are saying the administration is rewarding speculators who may have caused the housing market to collapse, and should focus solely on those who haven’t been able to pay their mortgages because of financial hardship. In a dream world, they would be right.
The problem with that notion is while speculators may have played a role in the housing market collapse, I still lay most of the blame squarely on the banks. You might say a so called ‘house flipper’ was only buying homes to pad their bottom line, to which I respond, what exactly do you the banks were interested in?
They were the ones engaging in rampant fraud, not the speculators.
I must again go back to this 60 Minutes piece about abandoned homes rotting their neighborhoods from the inside out. Banks response to these vacant properties has been to walk away from homes and allow them to go to waste.
(more…)
My good friend, Julie Kay, recently wrote a South Florida Business Journal story on the mixed reviews for the government’s Home Affordable Modification Program, or HAMP, as legislators like to call it.
