The last paragraph of Steve Tytler’s Jan. 24 column concerning loan modifications reinforced the myth that those “irresponsible people with bad credit” are the ones responsible for the housing crisis. He also reported that they are being “rewarded” for their bad financial decision.
As a realtor, I’m not seeing this. The majority of the situations I’ve seen where people had to short sale or go to foreclosure were related to job loss, health issues or self employment. Plus, a lot of these people had good jobs and good credit when they took out the loans. Also, I’ve yet to meet anyone who has received a loan modification, but do know lots of folks who have been trying since early 2009 to get one and still don’t have an answer.
He did bring to light two issues. The first is huge. The problem is that people fortunate enough to still have good jobs and good credit can’t refinance or get modifications because of dropping home values. I’m sure they do feel like they are being punished. The couple in the article had an interest rate that is 2 percent higher than the going rate, but their home is worth less so they can’t refinance to a better rate.
The other is that home loans were bundled and sold off quickly to investors. These people aren’t even eligible for the Making Home Affordable Plan because their loan is not financed through Fannie Mae or Freddie Mac.
The only way the public will be able to get lenders and banks to help more people keep their homes or get reasonable rates is to put pressure on them to help people now, not later. Ask your lender or bank what home programs they have for people with good jobs and credit, and ask them how many loan modifications or refi’s they have done. Better yet, find out what they did with their TARP money.
Teresa Block
Stanwood
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