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Rescue Plan Rankles Prudent Homeowners

Those who can pay mortgages feel cheated as neighbors get aid

By Matt Cantor, Newser Staff

Posted Oct 31, 2008 7:43 AM CDT

(Newser) – As the feds move ahead with a plan to help homeowners on the brink of foreclosure, others are questioning the scheme's fairness and wondering if it's ripe for abuse, the New York Times reports. “I am beginning to think I would have rocks in my head if I keep paying my mortgage," said one Connecticut homeowner in a familiar boat—he can make his payments, but he owes more than his home is worth because of sinking real estate prices.

“From a purely economic standpoint, there’s not a whole lot to be gained from staying,” said one analyst. Owners in such straits may attempt to work the system to their advantage by putting their own homes in default. “If the government says, ‘Prove that you can’t afford your house and we’ll redo your mortgage,’ then people are going to try to qualify,” says an analyst. The White House says the plan isn’t “imminent” as it weighs a variety of options.

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In this April 22, 2008 file photo, a bank-owned home is seen offered for sale in Moreno Valley, Calif. (AP Photo/Reed Saxon)

Treasury Secretary Henry Paulson speaks at a press conference at the Treasury Department in Washington, Tuesday, Oct. 14, 2008. (AP Photo/Gerald Herbert)

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Rescue Plan Rankles Prudent Homeowners