It’s Not My Fault

It seems as though the rule makers today are trying to insure that the foreclosure issues of today never happen again.

The complexity of getting a new home loan just got much more complex as of August 1st 2009. The problem is the rule makers have forgotten that prior to the Clinton/Greenspan Era, the rules worked fine for lenders, home owners and retiree’s. Many retiree’s invested their money in Fannie Mae because nothing was more sacred than home loans. The return on investment was good and there was safety of the retirement money, nothing was more secure than U.S. mortgages.

We are now creating a Nation of “it’s not my fault.” Whatever it is, someone else must be responsible for me and my decisions. The truth is, the mortgage problem is so big, in terms of dollars, no one knows how to deal with it. So far the priority is on lenders to modify loans. Facts are the re-default rate on loan modifications are about 75%. It appears that the fed’s only course of action is to just “kick the can down the road” and hope we can spread the foreclosure issue out over time. It’s simply too big a dollar amount to tackle head on.

How many times can you modify some one’s loan? I am not aware of a maximum number, however some have gotten loan modifications 3 times already. One study showed that 1 in 5 owners in default were filing for bankruptcy to stall or stop foreclosure.

I’ve always thought allowing Judges to modify home loans was a terrible idea. However, if clear guidelines existed for Judges and every one understood the rules, maybe it’s time. I never thought I would say that, but we now know that a contract is no longer sacred in America, and if an agreement does not work for me it must be someone else’s fault.