Subprime Borrowers With Best Credit Score Denied Help

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http://www.bloomberg.com/news/2013-07-16/subprime-borrowers-with-best-credit-score-denied-help.html

Travis Armstrong, a long-haul trucker, has made his mortgage payments for six years and has a credit score of about 800 that would entice most lenders. Because he owes more than his home is worth and his debt lacks federal backing, he’s stuck paying 7.5 percent interest, almost twice the rate of new loans.

U.S. President Barack Obama has failed to win Congressional backing for his proposal to expand eligibility for government-backed refinancing nationally to include people with mortgages like Armstrong’s. The only inroad so far -- a $10 million pilot program that began last month in Oregon that will purchase mortgages out of bonds and refinance them -- won’t help Armstrong, though. He lives about 14 miles (23 kilometers) from the only county accepting applications.

“It’s OK to skip payments and get help, or walk away and let the bank foreclose, but I’m stuck with no help ’cause I keep making my payments every month,” Armstrong said in a mobile phone interview from Interstate 64 in Illinois as he headed to Oregon. “It feels like the world has forgotten about people like me.”

As the U.S. real estate recovery accelerates into its second year, home prices are still 26 percent below the 2006 peak and almost 10 million people are underwater, or owe more than their houses are worth. While some of the hardest-hit regions such as Phoenix and Las Vegas are rebounding the fastest, cities like Cleveland are struggling to keep pace with national gains.

[Waiting For Everyman]

1. His bank should at least be forced to reduce his rate.

He's willing to pay on an underwater mortgage for pete's sake, there's no reason he should be paying double the market rate to do it. They're just trapping him in their own technicalities, which is happening today in other contexts beyond the one this guy is in.

We need to bring back usury laws.

[damyank913]

2. I'm in the same damn boat. Penalized for making my payments on time...

...Forget about the fact that I can't afford to send my kid to college.