The New Bailout Plan

So, they have a new shiny bailout plan for banks and homeowners to avoid a major surge (more than we currently are seeing) wave of foreclosures. Is it good? I think it is positive.

I even think that it is morally correct. By making this law for ARM loans that have adjustment periods of three years or less to keep rates the same for an extended period, it saves thousands of homeowners. It will save them money, stress, and time. I do not think that the rates need to be extended more than 5 years going forward, I think 7 years is excessive.

I also like Gov. Arnold California law that the rates will stay the same for 5 years and only if the owner sells in that time period would there be any kind of trigger for interest that should have accrued. I think that is extremely fair.

I have said it multiple times, this country has to start looking at a home as a place to live instead of an ATM machine and investment. By making a homeowner stay in there current home for an additional 5 years changes the mindset of many individuals. We have to see how this all pans out.

Just be aware, there is a cost to do this. And it will be passed through in different ways...higher rates on other loans, lower interest paid on CD (even lower than now), and more miscellaneous fees to your everyday accounts. It stinks, but this was going to happen no matter what the bailout plan was going to be or will ultimately be. We are still the ones that will pay for all of this.