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I agree that this is a waste of taxpayer funds.
If you can't afford your mortgage, then I'm sorry. That's the breaks kid. Looks like you'll be renting for awhile. I guess you really couldn't afford that much house after all.
The part of this that bugs me the most, is that no one has put the blame on the consumer.
If you purchase a house, you have a personal responsibility to know whether you can afford the payment, regardless of what the lender tells you.
You know damn well that you didn't put every single expense on your application. What about those $5 coffees you can't live without? What about the money you spend on beer, smokes, gas for the boat, bait, toys for the kids, etc.?
You should know that your house payment shouldn't be more that 30% (max) of your total income per month. And that's considering you don't have a boat, rv, atv or whatever toy payment.
So, if you make $6,000 a month, you can't afford anything over $1500. PERIOD. Even if the lender says oh, you can get a $200,000 house with 3% down. You should know that you can't swing a $2000 payment.
If you do have a yard full of toys, throttle back on your spending. Unless you're paying cash, you're setting yourself up for disaster.
What's wrong with saving to buy a boat? What's wrong with buying a used RV? What's wrong with living within your means?
Americans need to sack up. The government is not helping the situation with bailouts and mortgage renegotiation.
It gets even better, Alton. Fitch Ratings, Ltd. has just forecast that a majority of borrowers who get a lower mortgage payment under the brilliant HAMP (Home Affordable Modification Program) will default within 12 months. That means that our tax dollars are being squandered to pay lenders to reduce mortgage interest rates so that people who cannot afford their houses can live in them for another year before being evicted for non-payment. What a productive use of the taxpayers' money!