One aspect of the plan involves people who took out adjustable rate mortgages (ARM) a number of years ago. With the low interest rate offered by these ARMs, the homeowner could easily afford to pay the mortgage every month. However, when the rates adjusted up, as planned, the homeowner could no longer afford the increase in interest payment on the mortgage.
But, Obama has a plan to help these struggling homeowners.
He is giving them an Adjustable Rate Mortgage!
From ABCNews.com:
...3 million to 4 million homeowners with adjustable-rate mortgages, would be able to temporarily have their loans modified to a lower interest rate -- for at least five years.Isn't this what got these borrowers in trouble to begin with?
Obama will give them a rate they can afford now, but in five years the rate goes up and they can no longer afford to pay the mortgage!
What a brilliant idea!
With this plan, Obama is guaranteeing that these homeowners will be in trouble again in five years, when he gets to do another bailout, or will pass the problem onto the next president.
Obama is helping people who are having difficulty paying their Adjustable Rate Mortgages by giving them another Adjustable Rate Mortgage.
You go figure it out. I have no idea....
