In an effort to give more time for unemployed workers to find jobs, the Obama administration has introduced two new programs to extend the forbearance period on FHA loans. The mandatory limitation on the current forbearance is 4 months, and these new programs will extend that period to 12 months.
And while this will help struggling, out of work home owners in the short term, the long term effects on the economy are bad. The “there ain’t no such thing as a free lunch” rule applies here. Someone has to pay for these extensions, and guess who that is?
The American tax payer, of course! So that means if you are working hard, you will just be paying a little bit more in taxes to keep your unemployed neighbor, well, unemployed.
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