Gappers are the folks that fall in between. Gappers fall in between the government programs created to help the disadvantaged, the unemployed, and mortgage payment problems. My gaping gap is in the mortgage rule book. If one has a government mortgage guaranteed by Uncle Sam (FHA, Fannie Mae, and Freddie Mac), one may refinance without an appraisal and get the coveted new financing and very low rate guaranteed. One may get this special treatment, even though you may be upside down on your mortgage. Because of the past recession, my property is worth much less than what I owe. Even though I have steadfastly paid the mortgage, without late payments, and maintained my credit rating, no one will help relieve the pressure from paying a rate much higher than current rates. The relief only comes if you have missed payments, defaulted on the mortgage, in danger of foreclosure, and destroyed your credit rating. We call this a double edged sword, something that may help in one way, but create damage in another way. The newspaper occasionally tells of people that have been to hell and back trying to keep their home. There are many.
It’s amazing to see the results of some of the agonies endured by families. The family has a medical situation, the breadwinner loses his job or her business, through no fault of their own, and the choice is made between food and medicine, between mortgages and utilities. A foreclosure is consummated by the mortgage holder, at great expense to both parties. The house sits idle for a year, the pipes freeze, thieves steal the copper pipes and wiring for scrap, rodents infest the house, and the property becomes a crack house inhabited by the homeless (maybe the former owners). This affects the neighborhood property values and neighborhood values all at once.
Shouldn’t there be a system that has some variable qualifying aid that takes into account these yawning gaps that millions have fallen into? Well, there is. It’s called a home or mortgage modification. Through this government program, your mortgage is determined using your current first mortgage payment including property tax and insurance verses your gross monthly income. This percentage is set at 31%. Anything above that is your break on your mortgage payment. Google anything about: makinghomeaffordable.gov or mortgage modification should reveal the information one needs. Published each Wednesday, at least.
