Posted by Lambchop
President Obama plans to hold a press conference today (his first since November of last year).
FoxNews reports that
“Obama was to announce plans to let borrowers with mortgages insured by the Federal Housing Administration refinance at lower rates, saving the average homeowner more than $1,000 a year. Obama also was detailing an agreement with major lenders to compensate service members and veterans who were wrongfully foreclosed upon or denied lower interest rates.”
The reality is that $1,000 a year (about $84 per month) does NOT even cover the increase in fuel bills of the average family.
According to AAA stats, the average American uses about 533 gallons of fuel a year in their automobile. Gas prices averaged $1.84 per gallon when Obama took office and, today, prices average $3.70 per gallon.
In a family with 2 drivers, increased fuel prices over the past 3 years have already cost about twice as much as the “savings” on the mortgage payment.
What should trouble those who subscribe to free market principles is that in the current climate of record- breaking underwater homeowners, there are still 75% of homeowners with a 125% LTV (Loan to Value) who are making their payments on time. If we continue to make policy based upon our government “saving” those who are underwater…we may inadvertently be incentivizing those "75% paying on time folks " to default. More later.