About Government Refinance and Home Purchase Programs

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A recent article by Les Christie at CNNMoney.com publishes comments by readers none too happy about the help the U.S. government is offering homeowners. Here is an excerpt:

NEW YORK (CNNMoney.com) — Not everyone is happy about mortgage lenders’ latest efforts to help troubled borrowers.

Take Teresa Nelson. Instead of going for an adjustable rate mortgage with its lure of low initial rates, she opted for the security of a 30-year fixed at 7.10 percent for a house she bought in Pinellas Park, Fla. in December, 2005.
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“I was well aware of what an ARM meant, and was staying far away from those snake-oil pipe-dream promises,” Nelson said. “I also wasn’t shopping for a short-term, big payoff investment – I was looking for my home, until I retire.”

But many delinquent subprime borrowers who went for low teaser rates that shot up to unaffordable levels are now paying lower rates than Nelson as part of a new round of foreclosure prevention packages. And she doesn’t like it.

For example, one subprime borrower had a riskier hybrid adjustable rate mortgage (ARM) with a rate of just under 7 percent that was going to reset in December to 10.5 percent. But last month, as part of a new bailout plan from Countrywide Financial, the lender gave him a rate reduction to 5 percent on his loan, saving him hundreds of dollars a month.

Nelson feels cheated and has little sympathy for people who she believes weren’t as careful as she was. “Everybody was seeing dollar signs,” she said, “and let their greed get the better of them. So, no. No bail-out, no assistance with my tax dollars. Not one red cent.”

She’s not alone. Last month, many CNNMoney.com readers expressed outrage to bailouts – whether they involved tax dollars or not – after Countrywide announced good deals for bad loans.

Read the whole article here.

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