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The St Louis mortgage industry is puzzled at the report coming from the United States Treasury Department stating that approximately 90,000 distressed homeowners may lose their federal mortgage funding that was made available by the foreclosure prevention programs.
This report is not just for those who have yet to apply. The loss of monetary benefits includes those who have already completed their loan modification and have paid their lower payments on time every month.
While some of these consumers are losing their benefits due to their surprised latest failure to continue to prove that they were qualified for this help in the first place, many other approved homeowners are losing their current loan modifications due to earning too much or too little income since they started the process.
Although federal programs must have certain limitations to avoid fraud and misuse of governmental funding, what makes this program flawed according to many experts is that it actually penalizes those who are saving some of their income for retirement.
These new accumulated savings will put most homeowners needing this emergency foreclosure prevention over the limit and thus they no longer qualify. And these are the very ones that cannot qualify for a St Louis home loan.
There are many who are loudly calling for the government to stay out of matters that constitutionally dictate they have no right to enter in the first place. But then to disqualify those who originally qualified for funding doesn't seem fair as well.
These homeowners who by the way could not get a St Louis refinancing loan had to go through a rigorous red tape process by meticulously filling in all the paperwork to get approve for their loan modification in the first place.
This of course saved them from foreclosure. But the celebration came to an abrupt end. These responsible homeowners who were making their payments on time received word that Uncle Sam was not going to keep his end of the bargain.
The devastating irony is that taxpayers who have paid taxes for years to keep the government going are the very homeowners who now need assistance yet are denied such deserving benefits.