Who Should Get A 4.5% Home Loan?

Yesterday information was released that the Treasury Department has plans to try and drive interest rates down to 4.5%.  This sounds like a great idea on the surface, but who will actually get the opportunity to benefit from this is a different story.  Furthermore does this actually address the problem facing the housing crisis or is it just another failed attempt to the free fall?

On the surface the news headlines read like a fairy tale, 4.5% mortgage rates.  Who wouldn’t want to get that great rate on their home loan?  I think that everyone in the country that owns a home would agree to sign up for the reduction in payment and rate.  With that being said, does everyone deserve that kind of interest rate regardless of credit worthiness?  If the Federal Government is going to step in and offer 4.5% on home loans, then it should apply to everyone.  It shouldn’t simply apply to those that have substantial amounts of equity in their homes, and it certainly shouldn’t apply to only those that are at risk of losing their house to forclosure.  If tax payer money is going to be used to lower interest rates and write mortgages, then anyone who pays taxes should be given the opportunity to utilize the program.

On another note, the idea that this program is going to help stop foreclosures is ridiculous.  Individual that are in the process of foreclosure typically have fallen behind on their home loans by more then 3 months and wouldn’t qualify for this program due to diminished personal credit scores.  Furthermore, a significant majority of people in our country are upside down equity in their home.  They simply owe more then the house is worth due to the landslide in home prices.  This would also prevent them from taking advantage of the government sponsored loan programs.

Does this new 4.5% program have the teeth to stop the housing crisis?  Who should get the opportunity to have access to the 4.5% mortgages; do we made is sweeping program available to all home owners?  I’d like to hear what you have to say.  Please leave your opinion below and don’t forget about our Decemeber comment contest!