The inflated dollar issue is a mute point. Look at all ARMs out there that adjusted. They were based on inflated dollars from when the initial mortgage was taken out. And yet, we still have foreclosures. Five years is not enough time in my opinion if one wants to adjust rates back to the initial start rate. Give it ten years maybe or just leave the rate alone.

But my biggest issue is that the other culprits to our situation are going unchecked: Taxes and Insurance. Property taxes and insurance hikes are more guilty than rate changes. People were qualified for their mortgages based on today’s taxes, not the taxes that they will be charged the following year when the property was reassessed. I know that is a state issue, but the government is already meddling in this… why not go all the way? Also, the government is not doing anything to cap insurance companies from what they charge for homeowners. In fact, some insurance companies are denying policies and forcing homeowners to use more expensive state issued policies.

If they really want to fix the problem, then they need to address all the issues that got us here in the first place. Lax lending guidelines, increased property taxes, and inflated insurance premiums. Declining home values are not the problem; they are merely a symptom.

Does the plan rise the the Freddy Mac Survey Rate at closing or the original note rate?

John Maynard Keynes said, “In the long run, we’re all dead”. Time is on our side with this plan.