So Obama’s Treasury Secretary, Timothy Geithner gave details of Barack Obama’s Making Home Affordable initiative, and it does nothing but use our tax dollars to further the cause of socialism.
To put things in perspective, here is something we’ll call “A tale of two families”…
Family A: Joe and Jen who currently have a $50,000 combined gross annual income ($4,166 per month) got a $725,000, 7 Year ARM (NINJA- No Income, No Job, No Assets) loan in 2003 on a house that is currently worth $550,000. Their current loan balance is $720,000
The Oracle of Socialism, Barack Obama has decided that OUR tax dollars shall be used to offset the balance of the loan to the point where their payments are first and foremost reduced to no more than 38% of their gross monthly income or $1583.08 a month.
At this point, OUR tax dollars shall again be used to offset the payments so that the family pays no more $1,291.46 per month. The Modification MUST be done if the cost of modifying the loan is lower than the cost of having the house go into foreclosure.
Meanwhile, stepping out of Obamalandia into the real world…
Family B: Bob and Sue who currently have a $260,000 combined gross annual income (he’s a fireman and she’s a vice-principal ) got a 30 year, 7.5% APR, fixed interest, $350,000 loan in 2003 on a house that is now worth $340,000. Their monthly payment (Exclusive of taxes and insurance) is $2,590 .
So let’s compare Family A and Family B:
Family A:
Monthly Income is $4,166 ($50,000 per year)
Monthly Federal Income Tax is: $391.88 (Married, Filing Jointly, No Exemptions)
Home Value: $550,000
Monthly Payment: 1,291.46
Family B
Monthly Income is $21,666.66 ($260,000 per year)
Monthly Federal Income Tax is: $5,088.63 (Married, Filing Jointly, No Exemptions)
Home Value: $340,000
Monthly Payment: $2,590
(Taxes were calculated using Paycheckcity)
If you are not disturbed by the above scenario, you should be.Where do you think the money to modify the balance of Family A’s loan is coming from, if not from Family B’s income?
This is not Cuba, Venezuela or the United Socialist States of America, yet Barack Obama is using the machinery of state to rob the rich hard working in order to pay reward the lazy poor.Those who did the right thing are being punished, while those who tried to make a quick buck have succeded. Imagine how those who actually robbed banks in the last 8 years and got caught must feel.
Take a look at some of the details… NYT
Under the guidelines, loans can only be modified once, and the program applies to loans made on or before Jan. 1, 2009. Mortgages on single-family homes worth more than $729,750 are excluded.
A mortgage lender or mortgage-servicing company would first receive cash incentives to modify a borrowers’ loan so that the monthly housing payment declines to no more than 38 percent of the family’s gross monthly income. At that point, the government would match, dollar for dollar, the lender’s cost in reducing the payments as low as 31 percent of monthly income.
The reduced payments could come in the form of a lower interest rate, longer mortgage term or a reduction in the principal outstanding loan amount. The lender would have to make a calculation on whether its cost from reducing the monthly payments, after accounting for the government’s cost-sharing, would be less than the costs it would incur from foreclosing on the house.
The guidelines indicate that a lender would have to make the loan concessions if the subsidized cost of doing so would be lower than the cost of foreclosure. The decision would become voluntary if the estimated costs of the concessions appeared to be higher than the cost of foreclosure.
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