HSH’s underwater refinance planby Tim Manni
First Washington gave taxpayer dollars to banks, then Wall Street. Since then, Washington has pumped billions of dollars into Fannie Mae and Freddie Mac, automakers and delinquent homeowners of all sorts. Billions more have been spent on stimulus. Our government has helped those who have been at the edge of bankruptcy, insolvency and foreclosure.
But where is the help for a homeowner who has done all the right things? Washington hasn’t directed any financial assistance at the homeowner who is current on all their payments, who wants to remain in their home over the long term yet can’t refinance because the value of their home has fallen significantly. Low mortgage rates are great, but if you can’t access them, they’re useless.
In the present economic climate, it’s getting harder for millions of people to want to remain responsible homeowners. Frankly, as things stand now, there’s little financial incentive for them to continue to behave responsibly, and plenty of potential benefit should they decide to behave badly.
We spent a fair bit of time thinking about what is perhaps the only group who hasn’t received any help whatsoever: homeowners who owe more on their homes then they are worth. These homeowners have found no help from anyone, but we think we’ve got a concept that is worth considering. READ ON…