My own little take on boosting the economy and making more people happy.
I read an article, somewhere, just this week about how our economy will not recover as long as people are stuck in high interest home loans on homes that are underwater. The reference is to those who will continue to make their payments, and decrease the amount they spend on upkeep and new things that would promote job growth.
The homeowners can't refinance because they owe more on their home than it's worth. Lenders risk default on these loans and the bonus of "getting the home back" through a costly foreclosure process.
Just a few years ago, lenders were lending 125% of a home's value just because they bet home prices would rise. While that house of cards seemed to have been a mistake for some then, what about now?
If you have a homeowner making monthly payments at a high (comparatively) rate right now, and they don't default, wouldn't the idea of refinancing them into a lower interest rate improve everything?
I just think it would be better for everyone. People still pay, their principal is not decreased, but their payments are. The lenders get paid some interest, the homeowners stay in their homes and have more dispensable income to keep the homes in good repair and maybe buy a few more Christmas presents?
I'm just sayin'
The Quilting Realtor
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