There’s soo many plans out there right now, I just don’t have the time to give them attention. Honestly, every day I read the news there’s a new plan being proposed to help ‘cure’ this mortgage crisis. There’s a new plan to help homeowners avoid foreclosure, and walk from the debts they owe, unharmed. It’s getting ridiculous. The media is eating it up. What it’s really doing is destroying any credibility of a REAL plan actually going through. At this point, until I see it about to be voted on, I won’t give it the time of day. Most of them are great ideas for selling advertising space and commercial air time, but will never fly in actuality.

For example- I just read 2 plans out today. One will allow State and Federal Judges to reduce the principle balance (as well as reorganize the terms in the Mortgage Note) in order to reduce the payments for homeowners. This is great for homeowners, as they can keep their home, reduce their payments, and wallk from what they owe (and spent!). My reaction? No way in hell will the lending institutions allow a State judge to dip into their lending portfolios and completely take money out of their pockets. It just won’t happen, politicians will be thrown out of office if it even got close to passing.

The other ‘plan’ would allow borrowers to reduce their principle balance on their loans, but give the lenders the ability to recapture that loss if the home is sold for a gain later. The example in the article was that if a homeowner owes $100k on their home, but the home is now only worth $80k, they can reorganize their payment (or refinance their loan all together) based off of the $80k amount. However, much like a Negative Amortization, if the homeowner ever sells the home for a profit (up to $100k), the lender would have the ability to reclaim that $20k they walked from earlier. Now let’s think about this… if I owe $350k on my home, but it’s only worth $300k now, I could walk from the $50k difference all together. I would just sell my home for $300k, and go buy a different home at rock bottom prices. The lender would never have the opportunity to recapture their $50k loss. I’m sure the lenders are lining up to support this one.

I could go on and on about the stupidity of these plans, but it’s pointless. Most of them require the lenders to take a huge loss, and would ENCOURAGE non-distressed homeowners to take advantage of it, instead of help to ease the ‘foreclosure crisis’ going on right now. The more plans I see, the more I think the plans are made up by the media in order to spur more attention. It’s just ridiculous. You hear about this huge plan, but then it slowly disappears under the wraps of another huge plan. This is why I won’t be reporting on these things- just a waste of time. Until I see something officially getting voted on, I won’t worry about it. I suggest you follow the same thought process. And no, I’m not going to post a link to the articles on the 2 plans mentioned above- it’s not worth the click.