I wish to start this essay with two points that are the pillars of the article: The country would like to see the real estate industry begin to improve, for the good of the nation; and lenders who hold loans at higher interest rates are in more danger of additional foreclosures from their borrowers than if the borrowers had lower interest rates. These two propositions do not require a fervent belief for most people to get behind them and hope that the theories are correct. Actually, all I wish is that those in charge could understand and get behind these because, as of this time, it doesn't appear that they know, or worse than that, care. Here is why.
It isn't hard to figure out that people who are behind in their mortgage or facing imminent foreclosure get help so that we can stop the foreclosures and the continuing downtrend of the real estate market. The government has taken action to instruct lenders how to help these borrowers with the help of new government programs. Many are taking advantage of this help; some aren't, and additional borrowers are somewhere in between the two. What about the vast majority of Americans who have not fallen behind and are not in danger of foreclosure, but are underwater with their mortgage? Underwater means, of course, their mortgage is higher than the value of their property. These properties are worth less than the mortgage in part because of the foreclosures of those who either speculated, bought beyond their means, or simply decided it was better for them to let the house go than to stay and fight to keep it. Thus, it is fair to say that those who did the right thing, stayed and paid, are being hurt by those who couldn't or didn't want to continue on (not all who have gone through foreclosure could have done anything else and I do not mean to imply that everyone was a scoundrel).
Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.