Mortgage Blog

The government announced their bailout plan for borrowers who are defaulting on their mortgages today.  What I am most concerned with is that it only affects the people that have loans through Freddie Mac or Fannie Mae.  I'm concerned because the loans through Freddie and Fannie are almost all Fixed Rate loans that people with good credit qualified for.  In other words, it doesn't help the people in the 2/28 3/27 adjustable rate mortgages at all, because those were all sold to private investors, not Freddie/Fannie.  This doesn't seem to be much of an effort to help stop forclosures.  The two major problems and causes of the "Mortgage Crisis" are those 2/28 ARM loans and the housing bubble that burst.  The majority of mortgages in forclosure are on an ARM or the borrower is upside down on their home and don't care to make the payment anymore.  This "rescue package" for the Mortgage Crisis doesn't appear to me to be very strong at all.  I'm not sure that it will help more than a small percentage of the people out there that actually need help.

Colby