Of low mortgage rates and the Today Show

The Today Show had a segment about the low mortgage rates.  One of their takeaway points was to pay down your mortgage if you’re more than 125% underwater (to take advantage of refinancing).  Even if you were to do this, you’d still be at the mercy of the government program(s) to do this, and the bank has little or no incentive to actually help you.

Here’s what I wrote:


Love your show, Today folks, but have an issue with something I heard this morning in regard to refinancing and underwater mortgages this morning on your show. If a person is 125% or more underwater, there are no good options. Additionally, for all the talk of government programs, the banks have no incentive to actually assist the homeowner. Further, advising the homeowner to pay down the mortgage to the point where they can refinance is not a realistic option. Dropping tens of thousands of dollars against an extremely undervalued liability is not the best use of their money. In most cases, the best bet is to cut their losses. For those who would talk of moral hazard, we crossed that threshold $2 Trillion dollars ago.

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