March 29, 2013
MORE FREE STUFF– FOR DEADBEATS!: I read this story in the WaPo and I thought, “This can’t be right.” But then I remember I was living in the era of free stuff. Who benefits this time? Anyone who falls 90 days past due on their mortgage payments. Under a regulation proposed by the Federal Housing Finance Agency, any homeowner–regardless of income– who falls 90 days behind on their mortgage will automatically become eligible for reduced interest rates, extended time for payment, or other relief. The Post reports:
Some analysts worried that the new program could encourage borrowers to deliberately miss payments in order to become eligible for the program.
“The primary issue is whether this will encourage borrowers to strategically default on their mortgage in order to get the modification. This risk exists because the new program does not require the borrower to demonstrate financial hardship,” Jaret Seiberg, an analyst with Gugenheim Partners, wrote Wednesday. “
FHFA said Fannie and Freddie would use existing “screening measures to prevent strategic defaulters.”
Yeah, I’m sure that will work. Does doing the “right thing” even matter anymore, or does it just make you a doofus?