How lowering re-financed mortgage interest rates on foreclosed home owners will save the economy. The auto makers are now offering zero % financing, while the Federal Reserve reduced their interest rate to banks to one %, and is considering reducing it further to zero %. All this hoopla and fanfare with nothing yet for the little guys. What a way to run a railroad by railroading the public. Wall Street is already using the “bail out” to cover the mortgage foreclosure insurance, that they never intended to pay for. With FNMA and GNMC back under Federal Government control, the light at the end of the tunnel, however, now appears brighter with the possibility of home owners getting refinanced mortgages directly from them, similar to the 1970’s.
At present, the interest alone on a $300,000 mortgage @ 6% interest is about $18,000 annually. resulting in the homeowner unable to pay for the unforseen increased property taxes, insurance, medical premiums, automotive fuel and child day care, etc. The result of this is an unprecendented national housing foreclosure rate exceeding 2 million units per year with no relief in sight, thanks, in some instances to local government planning and zoning restrictions, requiring “$300,000 homes” to comply with their “infrastructure needs”, where $100,000 homes would not be permitted.
Also non-profit community sponsored $150,000 “affordable housing” proposals are being “rail-roaded” by local authority requiring land parcels to be purchased from them at $50,000 each. In addition, excessive home owner’s hurricane insurance premiums to cover “losses”, as well as $4.00 per gallon automotive fuel costs with little or no help from Federal or State officials. did nothing to avoid the crisis.
Lowering the interest rate to at the least 4% (the present VA loan rate) and extending the term from 30 to 40 years, with a government FNMA or GNMC mortgage could result in an immediate annual savings of about $8,500. This appears to be in conformance with the President Elect’s promise to re-negotiate existing forclosures to make them more affordable to the home owner.If the Congress has the authority to “pay off” the existing mortgage of a 90 year old woman who shot herself, I believe it also has the authority to refinance mortgages with an affordable interest rate. This has all the earmarks of a quick, easy and simple solution to the mortgage meltdown, while helping the little guys. It is also the opportunity for the president elect to solve the home mortgage crisis in an equitable and timely manner.