Austin, Texas (PRWEB) August 09, 2012
Financing giants Freddie Mac and Fanny Mae rejected the white house mortgage write down proposal to cut mortgages for struggling homeowners.
While this plan could help around 200,000 homeowners in mortgage reduction, Edward DeMarco, head of the Federal Housing Finance Agency,feels that this is just transferring debt back to taxpayers.
In addition to the cost, DeMarco also feels it would tempt struggling homeowners to default on their mortgage with the somewhat false hope of winning a mortgage write down.
However, Democrats were up in arms. Representative Elijah Cummings called the decision incomprehensible and Senator Robert Menendez called it terrible. Timothy Geithner, the Treasury Secretary, the Obama Administration and key Democratic law makers where unhappy with the rejection and requested DeMarco rethink his decision.
The Treasury Secretary’s belief is that the rejected plan would help 500,000 homeowners and save taxpayers $1 billion. However, DeMarco says the amount of homeowners to benefit from mortgage write-downs was very small. His data also shows that the savings to taxpayers would be $500 million, at best.
With the election looming, President Obama is trying to convince voters he has helped the economy recover. Romney, his opponent, feels that foreclosures should be allowed to continue so the housing market can hit bottom and then begin its recovery.
"The fact is that government interference in the housing market will only hurt the recovery," says Phill Grove, creator of the first post-bubble real estate program 'The Assignment of Mortgage Payments System'. "The solution to this housing crisis is to follow a real estate strategy that allows more homes to be sold at market price. Once this happens, and home prices start to increase, fewer home owners will be 'under water' and the need to waste tax payers money will be quelled."
About Phill Grove: Phill Grove has participated in more than 1,200 real estate transactions since 2003 using a variety of different real estate strategies. He owns 2 real estate companies in Austin, Texas: Love American Homes and Hippie Hollow Homes. For more information on Phill Grove, please visit his official blog page at http://www.reimaverick.com/rei-maverick-phill-grove/about-phill-grove/