We hear the voices from all angles. The economists on Wall Street offer their complex opinion on whether a solution should be even discussed. The news anchors remind us every day about how bad it is and how much worse it is going to get. Brace Up. Politicians looking to rake votes in tell us how they would have handled it differently and avoided it altogether. The only voice you never hear is the one from the midst of it all. And it spoke to me today.

It came in the form of a comment on a post from August 13th that I had written about the involvement of politicians into the subprime debate. I’ll let the comment speak for itself:

Concerned Mortgage holder

I have an adjustable rate interest only loan that is due to reset
next July. It is in my husbands name only. The house is in both our
names. We got this house with 100% financing. We are making the
payments fine. Our hope was as was most people’s 2 years ago is that
the value of the house would go up and we could get better financing in
the when the 2 year prepay was up. Because of the 2 year pre-pay and
the value of the house stagnating, we can not refi before the prepay
penalty is up. Now we are in the position that our house is financed at
100% of value or less and might not be able to get the house
refinanced. In the town we live in it is a small town and there is an
abundance of houses on the market. My husband and I do not want to
loose our house when the loan resets but we may have to walk away. The
things we have in our favor is I am not on the loan and I have
excellent credit. We could rent a house like ours for about 800 a month
less than what we are paying. So with my credit and my income we could
get a rental and not be homeless easier than we could re-finance our
house. We do not have the money to pay our house down to 80% of value
or even 95% of value in order to refinance when the time comes. I
believe there are a lot of people who are in my position. We could pay
the mortgage payment for our entire house if we could refinance it. The
problem is the value of the house has probably dropped since we bought
it and one cannot get financing for 100% much less more than 100% of
value. I believe the market will eventually turn around and my home
will be worth what I paid for it and someday even more. My husband and
I just want to stay in our house and eventually pay it off. Because of
the problems with the market that my not happen.

What I propose is that the note holders extend the fixed rate term
of the note for 5 to 10 years or so until the market is better or they
could just change the terms of the loan and make it into a to a fixed
rate. They will loose the interest that they may have made on the note
when the note adjusted if the people who owe on the note kept paying
there payment. However, if the people on the note just rent a home
before there credit gets bad and move out and send the keys to the bank
who is servicing the loan., effectively defaulting on the note. The
note holder will loose a lot of money. They still have to foreclose on
the house and then they have to sell the house in a very down market.
This is happening all over the United States Today.

This scenario could all be stopped by extending the current payment
arrangements until the market picks up enough for the people to
refinance their house or the income goes up enough to pay the
adjustable rate after it adjusts. The note holder would earn the
current interest on their money and not have to foreclose on the house
in a market where so many homes are being repossessed and cannot be
sold. This would bail out both the buyer and the note holder from a bad
situation.

In the event of a foreclosure the second note holders are the ones
that will be hurt most but the first holders are not in that great of
shape given how the prices are going down in some parts of the country.
A piece of something is better than 100% of nothing.

The problem with the FHA bill that congress just passed is that it
doesn’t address the needs of the people whose home is worth less than
they owe on it. Those are in the position to continue making the
current payments as they are, even though they owe more than the house
is currently worth. If those people do not have enough in savings to
pay the difference between what FHA will loan on their home and what
they owe on the house currently they will loose their homes.

I think my proposal is a good proposal however I have no idea how to
pitch it, and to whom can I pitch this idea. I would go to the banks
but most of the banks that you pay your payment to only service the
loans they do not own the loans. Does anybody know where I can go to
spread my idea so it will be taken under consideration? I have talked
to a few people in the mortgage market industry and they think it is a
good idea. Can someone help me? I can be contacted by e-mail at
astrial@earthlink.net.

Thank you for any and all help.

Bridget

I posted the comment on Active Rain where it fueled the same old debate of bailout vs helping people in need. Whether you agree with it or not, whether you think folks like Bridget should be helped or not, the fact remains that this person is not in default, hasn’t made a late payment yet and is terrified of the rate reset. She deserves a platform from where she can express her concern and see if her proposed solution would be a viable one. After all, she’s the voice from the midst of it all.

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