With aiming this towards people with credit scores of 580 it is very similar to what created a lot of foreclosures to begin with.
The taxpayers should not be backing 140 percent financing of a homes value to people with bad credit. When people have little of their own money invested,they have little to lose.Perhaps this will be the governments way of taking over housing.
imagine if they control Health care,transportation and housing.It is not a winning situation. Perhaps it will all be okay when 65 percent exist on government subsidy. The 35 percent should be able to see to it the other 65 percent are cared for.
I saw a lot of that here,a lot of people refinancing while rates were heading down,some several times and receiving a check for the difference. Instead of paying down their current principal they extended the loans back to full terms and splurged with the equity they had built up.
So they end up basically carrying a 30 year mortgage on cars , trucks,new cars for the kids,boats, the most expensive cell phone contracts and phones.
And on top of that, the same payment they had going in because of spending any equity they had accumulated.
When I see a 45000 pickup in the driveway to get groceries and a foreclosure sign getting nailed in the yard I can only wonder why we are in trouble.
And many of these people are the ones who now have a 580 credit score,"through no fault of their own".