Fixing troubled mortgages for the elderly

Sometimes older is not wiser. It seems that Pedro Garcia, a retired corrections officer, refinanced the home he bought for $23,000 40 years ago for $490,000 with what is known as an exotic "option ARM." In 2009 the house was valued at $150,000. When his payments had balooned beyond his pension's monthly income he quit paying. Bank of America, under pressure from tax cheat Geithner to remedy these bad decisions and "predatory lending" when money was flowing, refinanced it for $85,000 and then gave him a reverse mortgage on that, so he is now paying nothing. Of course, he'd already used that refinancing money--$70,000 to fix up the house, medical bills for his ill wife, and monthly living expenses. I guess the bank just eats that. But he still has a small second mortgage, which has also been modified by that lender. Something like 500,000 borrowers have been rescued by Obama's $75,000,000,000 foreclosure prevention plan. (WSJ story here) According to the article, Mr. Garcia and others were misled by these predators and the ARMs they pushed. No mention in this article about the number of non-profit organizations (like ACORN) that worked with banks and pushed both subprimes and ARMs especially for minorities. 32% of option ARMs were in foreclosure or delinquent as of August, compared to 48% of subprime. The difference is the option ARM people were good credit risks, sensible and wiser. Go figure. Pot. Rainbow. Free money.

And we're still seeing schemes from the government to put people into more housing debt, this time it's Obama instead of the Bushes or Clinton. Earlier this week there was an article on the tax credit plan for first time buyers. Claims for the $8,000 tax credit might have significant fraud. What a surprise! This little goodie if it is extended, will cost the tax payers an additional $16.7 billion. The new proposed ceiling might be $300,000 income per couple instead of the current $150,000. Under the current stimulus plan we the tax payers pay $43,000 for each borrower who uses that $8,000 tax credit. If they raise the ceiling, each tax credit will cost us $250,000 per home sale. (WSJ story here) Folks, you all took second grade math. Does this make any sense to you?

Update: On April 3, 2008 Michelle Malkin exposed the housing counseling racket, deep within the Bush Administration: ". . . mortgage counseling is a thriving racket that benefits far Left groups ranging from the AARP to ACORN to La Raza and Legal Aid. The Department of Housing and Urban Development funds hundreds, if not thousands, of these groups across the country. In October, HUD announced more than $44 million in new housing counseling grants to over 400 state and local efforts. The White House has increased funding for housing counseling by 150 percent since taking office in 2001." http://michellemalkin.com/2008/04/03/the-left-wing-mortgage-counseling-racket/

But wait--she appears on Fox News from time to time, so it must not be reliable.