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Obama’s Plan Deemed Unfair to Owners Losing to Tax Foreclosures

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By : John Cutts    99 or more times read
Groups of responsible homeowners across the country have expressed outrage at Obama’s $75-billion foreclosure plan. They charged that Obama and his advisers are using the tax money of people trying their best to pay their mortgage loans to pay the mortgages of irresponsible people. Some are also saying that the plan ignored the needs of Americans who have lost their properties to tax foreclosures.

One of those who have incited the complaint frenzy was Rick Santelli of CNBC, who covers Chicago’s commodity markets. He has been spouting outrage against Obama’s plan and has been calling for a tea party in the summer to demonstrate against the government’s plan to use taxpayers’ money to pay the mortgage loans of losers. Santelli stirred up homeowners who feel their taxes are being wasted on fellow Americans who have made foolhardy decisions and to property owners who have lost to tax foreclosures.

Because of the speedy circulation of Santelli’s attacks on the Internet, especially on YouTube, White House press secretary Robert Gibbs had to respond immediately to the attacks. Gibbs pointed out that Obama’s foreclosure plan clearly had exceptions. He said that among those who will not benefit from the program are homebuyers who in the first place were not qualified to take a mortgage loan, homebuyers who were speculating on home prices and borrowers who no longer have sources of income to continue monthly payments. For those who have lost to tax foreclosures, they can benefit from refinancing for their residential properties.

Gibbs explained that the foreclosure program will benefit millions of American homeowners who are not troubled by foreclosure and those affected by tax foreclosures. He explained at least two ways by which these groups, even those who have lost to tax foreclosures, can benefit from the program. Even if they are not in trouble with their mortgages, they can refinance their loans to take advantage of lower mortgage rates and thereby save money.

The second way is the preservation of home values. Gibbs explained that if one lives in an area where there is a property lost to foreclosure or even to tax foreclosures, the value of the neighboring property is decreased by at least 9 percent, which is equal to about $20,000 for average homes.

Gibbs further explained the advantages of the foreclosure program by using data from the U.S. Bureau of Census. He says that the $75 billion foreclosure funding matches the estimated 75 million occupied homes as of December 2008. This means that every homeowner across the country is investing $1,000 in taxes to help stabilize home prices and prevent the decrease of one’s home value by $20,000.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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