Congress and the President seem to be in a desperate rush to save everyone in foreclosure. However, there are several reasons for foreclosures and blindly giving everyone money will not help anything. While people have health issues or some other catastrophe that can severely impact income, there are other reasons.
One of the primary reasons for that the local foreclosure rate is the huge increase in value that occurred in Nassau and Suffolk . As a result, many people refinanced their mortgages in order to access this increase in equity. How many of the foreclosure are in this category? Why isn’t this reported? Where did the money go? Why should these people be helped unless that cash out is returned?
Another reason is that people bought homes they could not afford. When Fannie Mae changed the rules, any borrower could qualify for almost any amount. That does not mean that people had to buy the largest home they could find. For the largest purchase of a life time, some level of care or prudence should be exercised. Stupidity should have no claim on government funding.