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Wednesday, December 17, 2008

Mortgage Assistance Program Failing

The Washington Post informs us this morning that the Federal government's program designed to prevent rising foreclosures has received only 312 applications since it was created in October. In other words, more and more people continue to lose their homes despite (or because of) the best efforts of the Bush Administration and Congress.

"...the problem is that the program's success hinges on the lenders' willingness to participate. "

Therein lies the fault with the program and the source of the problem in the first place. Banks, mortgage firms, and credit card firms have been flashing easy money signs before nearly every single consumer for years. They are now up to their ears in bad loans. Every consumer cannot be expected to be a skilled loan issuer, they must rely on the advice of bank officers.

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Those who seek to pin this problem on the borrowers themselves have never attempted to read the full terms of any mortgage or credit card agreement. Experienced tax lawyers tell this author they can barely decipher the wording in the documents that accompany a mortgage or credit card. The borrower is at the mercy of the lender in every case.

Now the bankers and other lenders do not want to participate in the only recent proposals that might save their skins. Unlike rats, it seems they are willing to remain stubbornly on the ship until it slips beneath the waves. They also seem not to care if they drag the entire nation down into the whirlpool with them.

Links

The Washington Post article

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