San Diego troubled homeowners will not see a great deal of assistance from the Obama housing bailout according to the available details at this time.  Things may change, of course, by the scheduled March 4^th release of the full details on this plan.  As it stands now, here are the main reasons this plan will not help many San Diego homeowners:

A.  The maximum difference in the mortgage amount and the home's vale is 5%.  The average loss in San Diego home values just last year was well into double digits.  Even with an original down payment of 20%, one’s mortgage could easily be much greater than the 5% cap.

B.  The maximum original loan could not exceed $417,000.  While a $417,000 mortgage loan can only be for a luxury home in most parts of the United States, which would not necessarily the case in San Diego.

C.  The assistance only applies when one loan was originated. Many San Diego homeowners purchased with a combination of a first and second loans.

D.  Option ARM loans are not included.

E.  If you have a second (or equity) loan on your property, you are not included.

Every single person who enters into a mortgage should be responsible enough to consider the down side and be honest about their long-range job prospects.

I was calling it a housing bubble in 2003 and research shows that was not a bizarre or un-shared opinion.  The idea that the bust was a big surprise is just a modern fable used by people who don't want to take responsibility for their financial misdeeds.  The nanny-state solution we are now stuck with is the worst possible approach.

I take comfort from two things:

1)  It is a government administered program and will most likely fail to perform. The fact is that the government has a history of messing stuff like this up. It seems likely that the program will be bogged down by bureaucracy and ineptitude. I will not be surprised by news stories about people still losing their homes because they are unable to navigate through the maze of requirements and regulations.

2)  It is not as bad as it could have been.  Since absolute power corrupts absolutely we could have seen much worse.  Much as I dislike the administration’s politics, I find some comfort that the program is limited to primary residences.

Overall, this program is a severe blow to the good people who did the right thing.  The government is robbing us to buy votes from the those dishonest individuals who saw a way to game the system, and did it, knowing full well that they were taking unconscionable risks.                                          San Diego Realtor

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