Proposal for Alternative Mortgage
I would like to propose the following idea as a means to allay some foreclosures, keep people in their homes and ultimately help not only the Wall Street economy but also the people on Main Street America. The Alternative Mortgage would be available to people who don’t qualify for, and or in addition to, the HUD, Hope for Homeowners and other programs.
I believe this plan would be most beneficial to all parties by allowing for the maximum retention of homes by homeowners, maintaining home values in municipalities and minimizing losses to the banking/mortgage industry. The Alternative Mortgage would work something like this:
1. Starting with the date of signing a modification the past due Principal, Interest, (and if applicable) Home Owners Insurance and Property Taxes, be added to the end of the existing Mortgage extending its term. Depending on the financial situation of the homeowner the bank should be required to cede attorney and other associated foreclosure fees.
2. To facilitate keeping people who are in temporary financial crisis in their homes the mortgage payment should be based on a percentage of the household income. Income to be determined based on total household Federal tax returns and reviewed annually. (children living at home under a certain age and or still in college should be exempt unless particular circumstances prevail) This would allow banks to adjust mortgage payments as the home owner becomes financially stable again.
3. In the event of sale of the property or re-financing the total amount of principal and interest due on the reformed mortgage would be due and payable as in the due on sale clause of a regular mortgage.
Example: The homeowners can’t afford their mortgage payments due to the loss of income of one of the household members. They fall behind on their mortgage by 6 months. Their home is worth the same or more than the original mortgage. They agree to pay their mortgage company 25-33% of their after tax income as a mortgage payment while the unemployed person finds work. Their current arrears less late fees, attorney fees and foreclosure fees are added to the end of their mortgage extending the term by 6 months. For the period they maintain the alternative mortgage they provide their mortgage holder with copies of their Federal tax returns for annual review. Their mortgage payment can then be adjusted as their income stabilizes, up to but not more than, the amount of their original mortgage payment. (original mortgage payment with property taxes and insurance $1000.00, Reformed/modified mortgage payment @ 25% of homeowners household income, $750.00. per month with 9 months added to the term of the original mortgage, 6 - $1000 payments to cover the 6 missed payments and 12 - $250 payments to cover the 12 income adjusted payments. At the first annual review the homeowner has sufficient income to resume regular payments of $1000 and the reformed mortgage reverts to a regular mortgage with the additional 9 months added to make up the missed and adjusted payments.)
This would allow the economy to stabilize, people to keep their homes and banks to incur less financial costs than those associated with traditional foreclosures. This would also prevent further decline in the housing market helping to slow the depreciation of house values.
Monday, October 20, 2008
Sunday, October 12, 2008
Hours to work a miracle
I wrote this because I’m angry and frustrated. Angry because the people we elected to represent us in decision making matters, people who are supposed to be more knowledgeable than we ordinary citizens, dropped the ball big time and they did it more than once. I’m frustrated because no matter what I do to try to get my life back on track, circumstances beyond my control make things go horribly wrong and as the whole world is getting to know right now, it’s very disturbing to find that you really have no control over your own life.
…I have only a few hours to work a miracle.
That’s when our house is due to go up for auction in a foreclosure sale.
I know we aren’t alone; there are thousands of us out here losing our homes. Some people will be lucky, they’ll be able to work something out with their lender or take advantage of some home save program. Either way it requires you to have enough income to afford the plan.
What happens if you don’t make enough money?
Nobody seems to be addressing this issue.
When we bought our house in 2000 for $72,000.00 both my husband and I were working.
In 2003 when the company I worked for went bankrupt we lost 2/3 of our income overnight. Between April of ‘03 to present, with the exception of 2 ½ years spent going to college full time, I’ve applied for over 700 unique jobs. I’ve been asked to interview by 7 of those companies, 4 since I finished school. The last interview I went on had over 170 applicants for a single position. Even so, it seemed the most promising opportunity to date. They just informed me that they decided to hold off hiring because of the economy but they’re going to hold on to my application for when things get better. By then it will probably be too late for us. With the current financial crisis, jobs are going to be even tougher to find. I’m really beginning to feel like I’d have a better chance of winning the lottery than of landing a job. How are we supposed to save our house when we don’t have enough income for anyone to consider working with us?
Hope Now, Hope for Homeowners, workable solutions…none of them is going to do any good if you can’t make the payments.
Unlike Wall Street, there’s no bail out on our horizon, in fact there doesn’t seem to be any viable solution at all, at least not anything that can be done in less than one days time.
We have no place to go. We can’t afford an apartment. We have no family who can take us in. We don’t have any children, are too old, too young, don’t make enough money, make too much money. Waiting lists for subsidized housing are years long.
I don’t want one more person to tell me they feel sorry but they can’t help us.
I’d like to find someone who actually cares. Someone who can tell me where to find some real help. Someone who can tell me where all the jobs I keep hearing are out there, have gone.
Does anybody really care?
I am 53 years old. I am permanently partially disabled with arthritis in both knees.
What that means is I can’t do anything that requires long periods of standing, walking, lifting or carrying and I’m not disabled enough to get SSI or disability. I really don’t want disability anyway; it really doesn’t pay all that much and I want more from life than just survival. I have more years of experience than I care to think about, but experience doesn’t mean much any more. I graduated college with highest honors, Phi Theta Kappa. But I only have an Associates Degree and I learned very quickly that that doesn’t mean much either. I’d like to get a Bachelors Degree but Where am I supposed to live and how am I supposed to pay for school if I can’t get a job? Aside from these last 5 years, I’ve been working since I was 14; sometimes 2 jobs; not having a job makes me feel really miserable.
My husband just turned 59. He works in a small factory plating wire for the music industry. In 1998 he was making $9.19 an hour. His gross pay was $367.60. Gas was $1.25 a gallon and heating oil was $0.89. It cost $15.00 to fill up the pick up and $244.75 to fill the oil tank. Today he makes $11.90 an hour, grosses $476.00 a week; it costs $45.00 to fill the truck and $1050.00 to fill the oil tank. Over the ten year period from 1998 to 2008 my husbands pay has increased by less than 30%. The price of gas has gone up by more than 200% and heating oil has risen by more than 325%. This doesn’t even address the rise in the cost of food, clothing, housing services and utilities.
Is it just me or does anyone else see something wrong with the cost to income ratio?
…I have only a few hours to work a miracle.
That’s when our house is due to go up for auction in a foreclosure sale.
I know we aren’t alone; there are thousands of us out here losing our homes. Some people will be lucky, they’ll be able to work something out with their lender or take advantage of some home save program. Either way it requires you to have enough income to afford the plan.
What happens if you don’t make enough money?
Nobody seems to be addressing this issue.
When we bought our house in 2000 for $72,000.00 both my husband and I were working.
In 2003 when the company I worked for went bankrupt we lost 2/3 of our income overnight. Between April of ‘03 to present, with the exception of 2 ½ years spent going to college full time, I’ve applied for over 700 unique jobs. I’ve been asked to interview by 7 of those companies, 4 since I finished school. The last interview I went on had over 170 applicants for a single position. Even so, it seemed the most promising opportunity to date. They just informed me that they decided to hold off hiring because of the economy but they’re going to hold on to my application for when things get better. By then it will probably be too late for us. With the current financial crisis, jobs are going to be even tougher to find. I’m really beginning to feel like I’d have a better chance of winning the lottery than of landing a job. How are we supposed to save our house when we don’t have enough income for anyone to consider working with us?
Hope Now, Hope for Homeowners, workable solutions…none of them is going to do any good if you can’t make the payments.
Unlike Wall Street, there’s no bail out on our horizon, in fact there doesn’t seem to be any viable solution at all, at least not anything that can be done in less than one days time.
We have no place to go. We can’t afford an apartment. We have no family who can take us in. We don’t have any children, are too old, too young, don’t make enough money, make too much money. Waiting lists for subsidized housing are years long.
I don’t want one more person to tell me they feel sorry but they can’t help us.
I’d like to find someone who actually cares. Someone who can tell me where to find some real help. Someone who can tell me where all the jobs I keep hearing are out there, have gone.
Does anybody really care?
I am 53 years old. I am permanently partially disabled with arthritis in both knees.
What that means is I can’t do anything that requires long periods of standing, walking, lifting or carrying and I’m not disabled enough to get SSI or disability. I really don’t want disability anyway; it really doesn’t pay all that much and I want more from life than just survival. I have more years of experience than I care to think about, but experience doesn’t mean much any more. I graduated college with highest honors, Phi Theta Kappa. But I only have an Associates Degree and I learned very quickly that that doesn’t mean much either. I’d like to get a Bachelors Degree but Where am I supposed to live and how am I supposed to pay for school if I can’t get a job? Aside from these last 5 years, I’ve been working since I was 14; sometimes 2 jobs; not having a job makes me feel really miserable.
My husband just turned 59. He works in a small factory plating wire for the music industry. In 1998 he was making $9.19 an hour. His gross pay was $367.60. Gas was $1.25 a gallon and heating oil was $0.89. It cost $15.00 to fill up the pick up and $244.75 to fill the oil tank. Today he makes $11.90 an hour, grosses $476.00 a week; it costs $45.00 to fill the truck and $1050.00 to fill the oil tank. Over the ten year period from 1998 to 2008 my husbands pay has increased by less than 30%. The price of gas has gone up by more than 200% and heating oil has risen by more than 325%. This doesn’t even address the rise in the cost of food, clothing, housing services and utilities.
Is it just me or does anyone else see something wrong with the cost to income ratio?
Friday, October 3, 2008
Wall Street Bail Out
I tried to call CSPAN today about the bail out bill.
I wanted to tell them that my husband and I are both very much against it.
I did call our congressman.
I look at this situation on a much smaller scale by comparing it to our own personal situation.
My husband and I are facing the loss of our home to foreclosure.
We didn’t buy a big expensive house we couldn’t afford.
We were both working and we bought a little house for $72,000.
We didn’t get into this situation over night. I lost my job when my work place went bankrupt in 2003.
We used up all our savings, retirement, everything we could think of to save our home.
I went back to college and got a degree to improve my marketability.
I still don’t have a job.
If someone came in today and paid off our arrears it might help us today but not long term.
The bottom line is, unless we increase our income to at least our previous level, (actually with the way prices are going up we need a lot more) we’ll end up in the same situation in a very short time. If and when I manage to find a job it’s going to take a long time to get out of hole we’re in.
Wall St. didn’t get in this mess over night.
They made bad choices.
Buying up their bad paper today isn’t going to resolve this problem any more than ours would be solved by bailing us out of our immediate problem.
The underlying causes need to be identified and addressed.
A means of resolving the issues on a long term basis needs to be deliberately determined in a calm informed way.
Decisions made in panic and fear, are seldom reliable lasting solutions.
Our economy is in crisis.
Providing people with more credit without the means to repay that credit is not a sound policy.
People need jobs, I am one of many thousands of long term unemployed people, who no longer gets counted in unemployment polls.
We don’t pay taxes because we don’t have any income.
We don’t buy anything because we don’t have any income.
I and others like me, want to work, We want jobs that pay a LIVING WAGE so that we can buy cars, houses, pay for continuing education…
Without a strong foundation, a building will collapse.
Working people are the foundation of the United States economy.
Over the last couple of decades we’ve lost hundreds of thousands of jobs overseas.
We’ve frozen wages, cut wages and allowed prices to increase.
Our foundation is not only weak, we’ve taken a wrecking ball to it and now we’re trying to add a few more floors to the building it’s trying to support.
That we need to do something is obvious but make it about resolving the actual problem.
Paying off our mortgage isn’t going to resolve our problem and bailing out wall street isn’t going to resolve the problems in our country.
I wanted to tell them that my husband and I are both very much against it.
I did call our congressman.
I look at this situation on a much smaller scale by comparing it to our own personal situation.
My husband and I are facing the loss of our home to foreclosure.
We didn’t buy a big expensive house we couldn’t afford.
We were both working and we bought a little house for $72,000.
We didn’t get into this situation over night. I lost my job when my work place went bankrupt in 2003.
We used up all our savings, retirement, everything we could think of to save our home.
I went back to college and got a degree to improve my marketability.
I still don’t have a job.
If someone came in today and paid off our arrears it might help us today but not long term.
The bottom line is, unless we increase our income to at least our previous level, (actually with the way prices are going up we need a lot more) we’ll end up in the same situation in a very short time. If and when I manage to find a job it’s going to take a long time to get out of hole we’re in.
Wall St. didn’t get in this mess over night.
They made bad choices.
Buying up their bad paper today isn’t going to resolve this problem any more than ours would be solved by bailing us out of our immediate problem.
The underlying causes need to be identified and addressed.
A means of resolving the issues on a long term basis needs to be deliberately determined in a calm informed way.
Decisions made in panic and fear, are seldom reliable lasting solutions.
Our economy is in crisis.
Providing people with more credit without the means to repay that credit is not a sound policy.
People need jobs, I am one of many thousands of long term unemployed people, who no longer gets counted in unemployment polls.
We don’t pay taxes because we don’t have any income.
We don’t buy anything because we don’t have any income.
I and others like me, want to work, We want jobs that pay a LIVING WAGE so that we can buy cars, houses, pay for continuing education…
Without a strong foundation, a building will collapse.
Working people are the foundation of the United States economy.
Over the last couple of decades we’ve lost hundreds of thousands of jobs overseas.
We’ve frozen wages, cut wages and allowed prices to increase.
Our foundation is not only weak, we’ve taken a wrecking ball to it and now we’re trying to add a few more floors to the building it’s trying to support.
That we need to do something is obvious but make it about resolving the actual problem.
Paying off our mortgage isn’t going to resolve our problem and bailing out wall street isn’t going to resolve the problems in our country.
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