Charlotte Real Estate, Foreclosures, Short Sales

We still do not have any concrete information on the "bailout of Wall Street".  I've heard elected officials many times stress how important it is to make sure the bill includes provisions for "main street".  I believe they have coined this term to make taxpayers feel better about getting the short end of the stick.  From where I sit, there is no good way to protect "main street".  Here is why:

1. If you have paid your mortgage on time, you will pay for this bailout.  It has been said that you will benefit by having a stronger economy due to the credit freezes needed to run our nation being lifted.  My concern is that we have not seen any preliminary allocations of funds to know how much is being allocated to pad pockets versus stave off future bank failures and increase lending between banks.

2. If you are facing foreclosure are you are in default of your loan your mortgagee will become the U.S. Government.  Why do so many people believe that the Government is always a friend and will protect their people so much better than the free market?  If you qualify for a loan modification or forebearance, how many pages will you need to sign your life away with? If portion of your current mortgage amount can not be forgiven, will you then be subject to a lifetime of wage garnishments, foregoing any future tax refunds, lottery winning, inheritances, etc...  Okay, I'm being sarcastic, but my point is, making Government bigger is not always the best thing for the people or the best answer.

Why Loan Modifications Don't Always Work

More than 40 percent of all subprime ARM foreclosures that occurred during the three months ending September 30 involved owners who had already worked out some kind of deal with their lenders, according to a report from the Mortgage Bankers Association (MBA).  CNN Money has reported that although Hope Now, the government-led alliance of lenders, mortgage servicers, investors and community advocacy groups, says it helped 545,000 subprime borrowers during the second half of 2007, 33% more people actually lost their homes than in the first six months of the year.  The only thing that seems to work reported by the Neighborhood Assistance Corporation of America, NACA is lowering the monthly mortgage amount. 

In short, people will continue to walk away from their homes.  How do you lower a mortgage payment without lowering the amount of the debt?  I think that is the $700 billion dollar question.