The Chicago Tribune announced a new program to assist homeowners who are struggling with mortgage payments.
Beginning August 1 the Illinois Housing Developement Authority will offer underwater homeowners up to $50,000 in Federal Money to reduce the amount still owed on their mortgage.
In order to qualify for this financial assistance the homeowner must be current on making mortgage payments for the past 12 months.
The article goes on to say this program sponsored by Illinois Housing Development Authority and the U.S. Treasury Department Hardest Hit program will help 1,800 homeowners throughout the State of Illinois.
As I have said in the past this program will be "Another Failed Attempt to Help Homeowners who are Struggling,"
First of all homeowners who are struggling are concentrated in Chicago and in many poor neighborhoods. Many of these homeowners home values have declined more than 10% of the value remaingng on their mortgage and finally a majority of these homeowners have stopped making mortgage payments which automatically disqualifies them for assistance so the group of people who need the help the most will be denied assistance.
I see the only one's to benefit from this program are the investor's who own the mortgage. Let's face it the State, the Fed, and the US Treasury are all afraid to confront the source and root of the problem and that is the Mortgage Industry.
The Typical Loan Process
1. Home Buyer goes to Bank to borrow Money
2. Bank Lends Money to Home Buyer in the form of a Mortgage
3. Bank Sells Mortgage to the Secondary Market which is Fannie Mae and Freddie Mac
4. Fannie and Freddie Sell Mortages as Security Interests to Investors which are HedgeFunds.
So as you follow the Money you will really get to understand who this New Program is going to benefit. The Money given to Homeowners struggling is going to go directly to pay down the mortgage principal owned by the HedgeFunds.
This is why so many people like Elizabeth Warren, Bernie Sanders and others are saying the Banking system needs to be reformed. We really do not care about helping homeowners in the end the Banks, the Fed and Wall Street run the show.
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