Apparently the government has decided to choose the “winners” and the “losers” in the American economy. Nothing new about that, except they are doing it in the spotlight this time. For the past several months the “winners” have lined up at the Federal Corporate Welfare line they call TARP, while the “losers” continue to go to work and pay their bills on time. While this unfolds, we see government intervention wreaking more havoc in the markets daily. What started as a plan to shore up financial markets has grown to a cheese line for Corporate America. Secretary Paulson’s efforts have provided insiders access to our hard-earned money to squander or hoard, further deterioriating the credit markets.
Meanwhile, another government sponsored initiative “Hope For Homeowners”, reports that 58% of those homeowners helped with loan modifications have defaulted within 8 months of modification. I guess a 42% success rate is something to brag about if your business model defies logic. Is there any wonder the banks tried to resist government pressure to modify contracts? It is becoming apparent that most of the homeowners in need of a modification will not be able to perform on the new agreement. The sad fact is you must sell your home if you cannot pay the mortgage.
