Well what do you know another great idea from the government fails? In 2010 with fully one quarter of all mortgages under water and people looking to strategic foreclosure as an option our lovely brain trust in Washington comes up with a brilliant plan to save millions of these properties and adjust the value.
Simply put they would allow homeowners the opportunity to refinance their FHA loan at the adjusted value provided they had a good pay history. Pretty simple you might think, but after 1 year only 304 homeowners have been helped and the program has only 1 year left.
Bank of America, who received billions and billions in bailout money to help with loans, refuses to participate in the program. After their merger with Country Wide they control a full quarter of all FHA loans and received more bailout money than any other bank, but refuse any help for their customers in need.
The bureaucratic red tape created with this program guaranteed its failure.
The lender had to provide a short sale price and most have refused to provide one for the program.
Then the old lender and the new one had to agree on the appraised value.
Lenders who did participate made it very uncomfortable for borrowers to even move forward, by continually delaying and then requiring new paperwork, claiming what they had was out of date or lost.
The administration claimed millions would be helped and help stabilize the foreclosure problem and yet only 304 were helped and millions were foreclosed on.
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