Business

Who Is the Second Rescue Plan Really For?
by Milota Sidorova

Surely you remember Democratic Speaker Nancy Pelosi calling for the second ‘rescue plan’. In fact, Congress even in its last days was possible to work it out.
However…And here it starts back again.
According original intensions was meant to ease troubled mortgages for millions. Mortgage Bankers Association declared there have been more than 9 percent of borrowers or literally 4 million of Americans behind their payments.
And despite expected ‘strategy’ plan was been declared, more than good news it has attracted the critics. The proposal is pointless, doesn’t cover target group which put it into selective mood and negative impact in other economical branches. Definitely this isn’t a cure for people.

Government along with Freddie Mac and Fannie Mae said they were going to extend mortgage payments and lower rate cuts to separate group of their clients.
And that’s where the problem is. Both nearly bankrupted mortgage giants cover almost 6 of 10 loans but barely 20 percent of it can be categorized as – troubled.
But even if you ‘luckily’ belong to this group and you’re loosing your loan, Government will only help you if your house is in the game.
Point three. But even if you fail to pay your house mortgage for more than three months – that is obligatory condition including your almost 90 percent ownership of the real-estate you will have to have separate mortgage payments. What I mean is there have been many multi-packages, including pension and health insurance which makes it almost impossible to calculate the new rate. And if you have such one, this plan is simply not helping at all.

But if you are the lucky one, you can get extension from standard 30 years period up to 40 years that naturally declines payments. Or you can get lower rates adjusted to your income so you’re not paying more than 38 percent of your house spending. There are also some exceptions when the payments can be rate-free.

Naturally let’s say controversial, selective plan has had its Wall Street response. Dow Jones and the broad indexes declined signing there has not been much trust to put into the rescue.
And comparing to billions spent on banking sector, doesn’t it seem (with the best intension) like the rough outline for all mortgage companies which somehow react too slow to help their clients?


related story: http://news.yahoo.com/s/ap/20081111/ap_on_bi_ge/meltdown_mortgages;_ylt=AsJcJ.BkbSp2n4pfuuMuzhKs0NUE

by Milota Sidorova for PocketNews (http://pocketnews.tv)

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posted by Blog TechSource @ 2:03 AM