(Originally published September 4, 2010.)
In a story recently reported by Reuters, rumors are running wild from Washington to Wall Street. The Obama administration is allegedly about to order Fannie Mae and Freddie Mac, both placed under government control in 2009, to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth.
An estimated 15 million mortgages in the United States – about one in five – are underwater with approximately $800 BILLION in negative equity. While fiscally conservative members of the House and Senate are sure to condemn yet another huge government expenditure, the White House is gambling that more Americans will be grateful for the relief than offended by the use of their tax dollars to pay down someone else’s mortgage.
If you’re among those Americans who think this isn’t such a great idea, the biggest slap-in-the-face is that much of this mortgage assistance is being targeted towards the politically important states of Arizona, California, Florida, Oregon, Michigan, North Carolina, Nevada, Rhode Island, and South Carolina. And oh, by the way, these funds should be available just in time to influence the November elections.
Since 1992, Warren Goldberg has helped thousands of clients own their homes, refinance their mortgages, restructure their debts, and invest in real estate. Warren is known for his wide knowledge of mortgage products and wealth-creation strategies.