Come to the candy store: Feds fork over more cash to non-paying homeowners
I understood the logic behind some of the foreclosure rescue schemes floated by the government last year, including capping a home buyer's monthly payment at 31 percent of income. To be sure, it's a giveaway financed by your fellow taxpayer, but it had a larger goal of salvaging the housing and banking industries.
But what to make of the latest federal short sale subsidy that will pay a homeowner $1,500 in cash to move after he's ceased paying his mortgage for months if not years? This has to be the nanny state at its most smothering:
Once the short sale closes, we will release you from all responsibilities for repaying your mortgage. Plus, you will receive $1,500 to help pay some of your moving expenses. (The check will be paid to you by the settlement agent as part of the closing.)
If that's not enough, the government will give $1,000 to the servicing agent and $1,000 to the lender/investor. Both are "incentives" meant to streamline the short sale process and prevent properties from going to foreclosure. Here's the link to the Making Home Affordable Web site (The incentives are listed starting on page 11).
Where to start? Most homeowners aren't sued for foreclosure until they've missed at least 3 mortgage payments. Once they're sued, most homeowners cease paying entirely, essentially living rent free for another 6 months to a year on the bank's dime.
And we're not even including tens of thousands of dollars in loan forgiveness when the short sale closes.
Is it too much to ask for a homeowner to cover the cost of his own U-Haul, to pay for the gas to fill up the pickup he borrowed from his buddy and to buy the pizza for the teens who helped move his furniture?
Apparently in today's Washington, D.C. the concept of the government meeting you half way has been replaced with the government meeting you on your doorstep.
This moving van subsidy treats adults like children, and disabled children at that. And it squanders tens of millions of dollars on a pointless handout.
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Housing market news is the focus of the (Un)Real Estate blog. It offers an inside look at the Florida housing market and real estate news, with a focus on Tampa Bay. Its goal? Simple: To help you keep a roof over your head without losing your shirt.
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