Do All Homeowners Deserve A Bailout?

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March 1, 2009
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March 5, 2009

Do All Homeowners Deserve A Bailout?

Jeff Gray, a former Marine and unemployed security guard, is begging his mortgage company for a loan modification to keep his family of four from being evicted and put out on the streets. Before you start feeling sorry for him, listen to how he got himself into this situation and how he has been living rent free for the past four years.

Gray and his wife and two children have lived in the home for ten years, purchased in 1999 for $200,000. In 2005 the family came onto tough times, with Jeff losing his security job and his wife’s income being significantly decreased. Credit card bills started to pile up and just when it seemed like there was nothing they could do, Jeff learned that he could refinance his house and pull the equity out to help pay his bills.

He would not have qualified for this refi, except for the fact that he claimed that his monthly income was more than 20 times what it actually was. Under these falsified loan documents, which the mortgage company helped him fill out, Jeff was  able to double their mortgage and pull over $175,000 dollars out of the house. This money was used to pay off creditors among other things, but not a penny of the money went back into the house. In over four years, Jeff has not made one single mortgage payment towards his newly refinanced home. Not surprising since this last year on his taxes, he claimed only $7,900 of taxable income. His current mortgage payment is over $2700 dollars.

So far Jeff has avoided three foreclosure notices by filing for personal bankruptcy, and the lender is not willing to work with him unless he first pays $10,000 towards back payments, money he does not have.

Should the mortgage company work with him or should he be throw out of the house? Is this the kind of thing that has gotten this country into the trouble we are in? How do we draw a line between who gets bailed out and who gets thrown out?

See the whole story here on CNN.com

If you have any question, feel free to contact me anytime at [email protected] or 979-255-1839

Clay Lee

College Station’s #1 Luxury Lifestyle & Real Estate Expert for over a Decade!

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