Real Estate News Overview:
A NEW refinancing program is now available for Homeowners that are facing foreclosure and owe 5%-25% more then what their house is worth. The government is attempting to reduce the continual rate of foreclosures by implementing refinance assistance through Fannie Mae and Freddie Mac.

Real Estate Investor Coach Response:
OK, this one confuses me a little bit… People who aren’t making their mortgage payments are going to be allowed/or considered for a refinance on their loan. I’m not a gambling man, but I would wager a guess that a good majority of the people who are allowed to refinance with this program will default again within 2 years or less.

I don’t mean to sound cruel here, but I firmly believe that at some point enough is enough and the government needs to step back and let the people of our nation deal with the consequences of their own actions. Unless a distressed borrower is a military person, elderly, or suffered from an undeniable financial hardship then this new refinancing program is not something that I agree with in regards to the spending of our tax dollars.

In my opinion, it would make more sense to allow this refinancing option for someone who is current on their payments but owes 5%-25% more then what their home is worth. These people are the ones who will keep making the payments. Why not reward the people still in good standing busting their butts to make their mortgage payment each month even though they owe more than what their home is worth?

The government should REQUIRE that borrowers take responsibility for their actions without pointing fingers and allow the defaulted loans to take their course. These homes will be foreclosed on and or purchased by investors (like us) and then resold at current market prices, hence correcting market prices the right way. Does it hurt when you rip of the band-aid quickly? Yes, for a moment but then the pain turns into relief and the wound heals naturally. Allowing most distressed borrowers to refinance is a waste of government money, time, and resources and merely puts a band-aid on the real problem and prolongs the true healing process.

Agree or disagree with me? Let others know by posting your comments below.

To your Real Estate Investing Success,
Brian Evans