Non Fiction: A Real Life Story of the Bailout

One day, a girl called up her mortgage broker when the 30 year interest rates were at record lows of 4.75 percent ( APR of 5.0% ). This girl has a credit score that always has new loan officers amazed as they rarely see scores so high. She is smart with her money and has maintained a good debt to income ratio with her only debt being a mortgage. She also was careful to save and put 20% down on her house when she bought it and responsible enough to get a fixed rate rather than be suckered into an ARM.

But those honorable and responsible qualities became her downfall. Because her home value three years later has dropped 30% ( 10% lower than the 20% intially put down ), she is not able to refinance her fixed rate to a lower interest rate that would save her $400/month.

Now, I ask........exactly WHO is this "TARP" fund supposed to be helping? Because honestly, if someone like the person mentioned above isn't able to refinance, who is? Those who got 3 and 5 year ARMs most likely didn't put ANY money down and are more under water than the person who put 20%. Why are they able to be bailed out/principle reduced and get a lower interest rate? The same group of people who are foreclosing and caused home values to depreciate 30%+? Honestly. How is a lower interest rate going to help this mess? The 10 year treasury could drop to 1% and our non fiction person in our story STILL wouldn't be able to refinance unless they coughed up another 10% and then would still have to pay $100/month of PMI which she has never ever had to pay on previous mortgages.

idiots.