FHA Book

Quagmire.

The title above is the only word I could think of to describe the current mortgage situation and the tangle of proposed solutions. Although I have always been a supporter of FHA reform, David C. John at Heritage.org makes some very good points about the very serious problems with the Frank-Dodd FHA Refinance Plan. His list of shortcomings include the poor precedent it will set, the unfair aspects, and its inability to help the amount people it proposes to help in a reasonable amount of time. Another point he makes is:

Frank-Dodd will not stop foreclosures, even for many who qualify. During the time it would take to refinance mortgages, mortgages servicers will be legally bound to follow the terms of the existing contract in case the refinancing falls through, including steps toward foreclosure.

Although I still believe that the bill will be able to do a great deal of good, it’s always important to look at both sides of an issue and consider solutions for these problems.