From today’s Hartford Courant…
The state of Connecticut is unveiling a $50 million program to help first-time homebuyers caught up in the subprime mortgage mess.
The Connecticut Housing Finance Authority is offering to help low- and moderate-income borrowers by refinancing their adjustable rate, subprime mortgages into 30-year, fixed rate loans. The authority will begin taking applications on Dec. 10.
Subprime mortgages are typically targeted at borrowers with risky credit.
First-time homebuyers who cannot make their mortgage payment and currently live in the home can apply for the refinancing. The housing authority will work with the homeowner to make sure the new mortgage payments fit with their budgets.
About 300 to 400 families are expected to be helped by the program.
This really irks me.
Not just from a taxpayer perspective.
Take the $50 million and divide it by the 400 families which the program will help. That works out to $125k for each family.
That’s about what I owe on my home right now.
But you know what? Because I was smart when I went out and found a mortgage as a first-time homebuyer, I didn’t go for an adjustable rate. I was informed of the risks, and I wasn’t willing to take them. Essentially, the risks outweighed the benefits.
Based on the past few months, it was a wise move.
But now, it was evidently the wrong move. I could have been paying a nice limited time offer promo-rate mortagage bill all this time (interest-only would have cut my mortgage bill in half?!) and the State would have come to bail me out in the end. That… is not right.
I don’t know the specifics of the program, but I truly hope that these folks end up paying well beyond the traditional 30 years. And that the little equity they may have in their homes is wiped clean.