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February 18th, 2009
10:16 AM ET

Q&A on the foreclosure plan, and what it means for you

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Questions and Answers for Borrowers about the Homeowner Affordability and Stability Plan from the U.S. Department of Housing and Urban Development.

Borrowers Who Are Current on Their Mortgage Are Asking:

1. What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?

Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.

2. I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?

Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.

3. How do I know if I am eligible?

Complete eligibility details will be announced on March 4th when the program starts. The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.

4. I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?

As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.

5. Will refinancing lower my payments?

The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a "Good Faith Estimate" that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.

6. What are the interest rate and other terms of this refinance offer?

The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.

7. Will refinancing reduce the amount that I owe on my loan?

No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

8. How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?

To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.

9. When can I apply?

Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.

10. What should I do in the meantime?

You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes:

· information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources

· your most recent income tax return

· information about any second mortgage on the house

· payments on each of your credit cards if you are carrying balances from month to month, and

· payments on other loans such as student loans and car loans.

Borrowers Who Are at Risk of Foreclosure Are Asking:

1. What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?

The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.

2. Do I need to be behind on my mortgage payments to be eligible for a modification?

No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.

3. How do I know if I qualify for a payment reduction under the Homeowner Affordability and Stability Plan?

In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.

4. I do not live in the house that secures the mortgage I'd like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?

No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.

5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?

Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.

6. I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce the payments on both?

Only the first mortgage is eligible for a modification.

7. I owe more than my house is worth. Will the Homeowner Affordability and Stability Plan reduce what I owe?

The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender's discretion modifications may include upfront reductions of loan principal.

8. I heard the government was providing a financial incentive to borrowers. Is that true?

Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner Affordability and Stability Plan provides incentive payments as a borrower makes timely payments on the modified loan. The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt. Borrowers who pay on time for five years can have up to $5,000 applied to reduce their debt by the end of that period.

9. How much will a modification cost me?

There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan. If you wish to get assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a fee. Borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance.

10. Is my lender required to modify my loan?

No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.

11. I'm already working with my lender / housing counselor on a loan workout. Can I still be considered for the Homeowner Affordability and Stability Plan?

Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.

12. How do I apply for a modification under the Homeowner Affordability and Stability Plan?

You may not need to do anything at this time. Most mortgage lenders will evaluate loans in their portfolio to identify borrowers who may meet the eligibility criteria. After March 4 they will send letters to potentially eligible homeowners, a process that may take several weeks. If you think you qualify for a modification and do not receive a letter within several weeks, contact your mortgage servicer or a HUD-approved housing counselor. Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.

13. What should I do in the meantime?

You should gather the information that you will need to provide to your lender on or after March 4, when the modification program becomes available. This includes

· information about the monthly gross income of your household including recent pay stubs if you receive them or documentation of income you receive from other sources

· your most recent income tax return

· information about any second mortgage on the house

· payments on each of your credit cards if you are carrying balances from month to month, and

· payments on other loans such as student loans and car loans.

14. My loan is scheduled for foreclosure soon. What should I do?

Contact your mortgage servicer or credit counselor. Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower's eligibility. We support this effort.


Filed under: Bailout Turmoil • Housing Market • Raw Politics
soundoff (483 Responses)
  1. P !

    HOMOwners shuldnt have to pay mortgagez house shuld be free. Obama RULES! CHANGE! CHANGE! CHANGE!

    February 18, 2009 at 2:59 pm |
  2. DEB

    SO WHAT about people like me who were frugal and did not spend MONEY THEY DIDNT HAVE!
    I hope those of you who maxed your cards out and bought more house than you can ever afford, appreciate what the rest of us are doing for you!

    February 18, 2009 at 2:59 pm |
  3. Larrty

    Come on American and CNN . . . the problem is trying to give houses to those who could not afford the houses. And many tried to purchase more than they could afford. Get your heads out of your lower body part and start defining the problem. It does no good to continue democrat give-away programs to cover up previous bad decisions.

    February 18, 2009 at 2:58 pm |
  4. Upstate NY

    You know, there are cases out there where honest, trustworthy people have been hard hit by the economy and could use some sort of "help" to be able to hold onto their home. BUT, for the thousands of fools who bought a small palace on a small salary, and then tried to "keep up with the Jones's" by buying flat panel TV's, brand new cars, and all of the stupid modern entertainment electronics available on the market....LET THEM GET AN APARTMENT. Come on, is living within one's means such a foreign concept nowadays? All of this bailout nonsense went too far months ago when we bailed out Wall Street. Cut it out and let the market stabilize naturally. Throwing taxpayers' money at everything isn't going to fix the problem, and it's going to run up the deficit higher than people realize.

    And yes, what about first time home buyers? You know, the number of Americans who the banks have shut out? Unfortunately, there are only two words for the first-time home buyer: HAVE FUN. Or possibly: HA HA. Even that nice little tax credit in the new "stimulus" bill won't help you, folks. You only get that money AFTER closing. Does Congress realize that the banks won't take an I.O.U. for a portion of the down payment?

    February 18, 2009 at 2:58 pm |
  5. EAH

    William – you should talk to the President. You are the middle class like so many of us. We aren't poor or rich- we're just in the middle and we have been forgotten!

    February 18, 2009 at 2:58 pm |
  6. Sam Dallas

    What about the rest of us. I just got turned down on a refinance because of my property value dropping to exactly what I owe. I do not have a loan with Freddie Mae or Fannie Mac. Why am I not eligable for a refinance under this plan. So you only get help if you have a loan thru one of these two loser organizations whom are the ones ultimatly responsible for our situation. So I have a loan with a good mortgage company and I have to be left out because I did not take a loan from the Fannie Mae clan of rip off artists. This bail out is only for those who screwed up to begin with and the rest of us are going to pay for it. Our property values are going down down down.

    February 18, 2009 at 2:47 pm |
  7. Thomas Parker

    I was in forclosure on my mom's and dad's house. I filed chapter 13 bankruptsy to keep the house and have just recently finished paying of my 5 year chapter 13. I owe nothing and have no credit only a poor credut score. I was trying to repair my credit with a secured credit card for starters. Does this thing that has happened the stimulus and the foreclosure plan include me and will I be able to secure a loan –home equity or mortgage one under this plan.

    February 18, 2009 at 2:47 pm |
  8. Tonya C.

    Chris L. said: "You know what, for all of us who live within our means" "all my credit cards are maxed out" – from a "responsible" american. This is such a joke.....All I hear on this blog is selfishness and hatefullness. What do those of you want who are doing "okay?" I don't get it?? You are all complaining about helping other Americans, but not one word about the murdering of our children's future by Bush and this horrible, useless, war!! What are you scared of....a level playing field? lmao! By the way, I don't have a penny of credit card debt, paid it off when I bought my home and really learned to "live within my means" but still lost my job......go figure.

    February 18, 2009 at 2:46 pm |
  9. Sarge

    Stop hating the players and hate the game. Tax cuts or spending? This plan has both. We haven't been in this same situation before and everyone has an opinion on how to fix it. Stop hating your fellow American because you think it’s your neighbors’ fault we’re in this mess. Give President Obama a chance to put SOMETHING in play. I’m sure we the people we hold him accountable. Doing nothing makes it worse for all.

    February 18, 2009 at 2:46 pm |
  10. You asked for it!

    I don't know why everyone is complaining about this...when you voted for Obama, Pelosi, and all their tax-shirking minions, you essentially voted for your tax dollars to be wasted on this – helping out the greedy and those who willfully didn't live within their means. Unfortunately, the vast majority of society believes that the federal government owes them something for nothing. Nowhere in the Constitution does it say that the government was designed to help you out. You're entitled to 3 things...the right to life (unless you're an unborn baby who can be killed for convenience sakes...thanks humanists), liberty and the pursuit of happiness. Whatever happened to saving for a rainy day, retirement, etc.? Whatever happened to people trying to improve their plight in life and making the effort to better themselves? Oh wait...who cares? Obama promised that the government will take care of you...why do you think the welfare class voted for him? I'm 28 years old and I know this...but then again I voted for the other guy

    February 18, 2009 at 2:46 pm |
  11. Hildegarde

    I just called my lender because I know I quilify for a Affordibilty and stability plan. and my lender is Litton Loan Service out of Houston, Tx. I asked them who was the bank that owned them and they said Goldman Sach and they my not participate. I asked should I call back after march the 4th and they said they don't know when they will make that decision.

    February 18, 2009 at 2:46 pm |
  12. Dena Weisman

    I just got off the phone with my lender First Franklin. Turns out that my loan is NOT Fannie Mae or Freddie Mac. So I'm left out of "the plan"
    They offer loan modification, but to them that means they "freeze" your loan for 2 years. The interest rate doesn't come down. But they will give you 2 years, so that hopefully you can get yourself in position to refinance and get it fixed.
    So far as I can see President Obama has been working his rear off to help our country. Just the fact that something is being done is a miracle in itself.
    To those of you who complain about helping others all I can say is "shame on you". You never know when your "luck" might change, do you? You hide under the guise of being "rightous", and hard working. Well most of us that are in trouble were hard working and a) we're Human, we probably made an unwise decission b) we weren't all knowing,and didn't see the finacial system falling apart.
    And nobody's looking for a hand out. Gotta go. Have to find out if I qualify to get an extension on my Cobra!
    Make your day count!

    February 18, 2009 at 2:44 pm |
  13. Fiscally Responsible

    Ditto what Good Borrower said: I'm really sick of paying for the messes created by irresponsible idiots – both the bankers and the borrowers. If I sound a bit hostile, it's because I had to pay for the Savings and Loan fiasco in the seventies, so this is my second time bailing out rich and/or irresponsible people.

    I didn't buy a house or car that I couldn't afford, but I have to pay for those that did. They'll get to stay in their home using my money while I continue to rent.

    February 18, 2009 at 2:43 pm |
  14. Tommy

    My car is worth less than the balance of my car loan. Can I get my car loan subsidized by the US government? The mortgage bailout plan is dumb. I have no problem with the banks lowering these fools interest rates. But, to make my children subsidize their mortgage loans is morally criminal. This is taxation without representation. My children didn't get to vote in the last election. But they will be taxed in the future for this criminal act.

    February 18, 2009 at 2:42 pm |
  15. SickofLame-O's

    Renters are in the same fix that home owners are in that were responsible. Basically, a bailout is if you got yourself in a situation that you couldn't afford. So, if you are elgible for a bailout you were irresponsible.

    Has everyone forgot about RISK and REWARD? As risk goes up, the chance of a reward goes up. However, everyone just forgets that as the chance of reward goes up due to risk so does that chance of getting smacked.

    How many TV shows have been on about flipping houses? Did anyone else think things didn't add up when you could by a house for 40,000, paint it and sell it for 350,000? This is the practace that got everyone in this situation. These same people that were bragging about making $100,000 on a house are now the same people begging for a bailout. I didn't here anyone say "wow, I made 100,000, who wants some of it". Now you are hearing "I lost 100,000, when is someone going to help me".

    I HAVE NO SIMPATHY FOR THIS SITUATION. IF YOU TAKE RISK, IF YOU WILLING TO TAKE THE REWARD, BE READY TO TAKE THE FALL!!!!!!!!!!!!!!!!!!!!!!!

    February 18, 2009 at 2:41 pm |
  16. Cal

    Shouldn't this plan have a home value cap to qualify? For example, do we really need to help (subsidize) a family or individual escape foreclosure who has a $750,000USD home in an area with a $300,000USD average home value?

    February 18, 2009 at 2:40 pm |
  17. Jason Miller

    I have two foreclosures across the street and am now about 20% upside down on my home. My mortgage payment is current and consumes about 12% of my gross monthly income. What is Obama's housing plan gonna do for me? Nada! Well commrades, my ability is great, and your needs are many, so help yourselves to my tax dollars. This is one Democrat who is ashamed he voted for Obama. This whole bailout fiasco has been fundamentally unfair to those of us who tried to do the right thing. Because we did the right thing, the government has to appropriate our money to fix that which the irresponsible screwed up. I hope the Republicans continue to ask the tough questions. Honeymoon over!

    February 18, 2009 at 2:40 pm |
  18. Rocco

    It sickens me to listen to all the winers! I Wish that just one of these people were to face forclosure. Not all, but many people caught up in these bad mortgages got there because of de-regulation and preditor mortgage brokers. This is not a pretty situation but Obama did not create it. Nearly 30 years of Reaganominics is the cause of most all our financial problems. When more Americans wake-up to what de-regulation has cost this nation we may begin to find our way back.

    February 18, 2009 at 2:40 pm |
  19. Margaret in OH

    Wow- Interesting discussion. I think it is important to remember that the housing crisis is one part of the economy spiraling downward that affects other parts of the economy such as jobs, banks, etc. I don't think it is supposed to be about- " What is in it for me?" as much as how this housing plan will or will not help the economy as a whole revive itself and stabilize.

    February 18, 2009 at 2:39 pm |
  20. Houston

    Why is everybody on here so against helping their neighbors? Is there no sense of community anymore, for those of you that are against helping anybody else I really hope you don't lose your jobs in this economy. I bought my first home 9 months ago, and was laid off in December. I thought that I had a safe position and was financially able to get into our first home in a market that was great for the first time home buyer. My wife's income is half of what mine was last year, thanks to unemployment we are making our house payments but even since I bought our house the mortgage rates have dropped a full percent, however there is now way I would be able to refinance with only my wife's income. If President Obama's plan will encourage lenders to refinance people's loans who are struggling in this economy that's a good thing, if you don't stop the foreclosures, those of you who are lucky enough to still have jobs and your home will continue to see a falling value in your home. And since the economy is still bad if it hits you later and you lose your job, you'll have an even larger difference between your home's value and what you owe.

    So many of you keep saying you did the right thing, you only bought what you could afford, etc... well so did I but how much could you afford if you lost 75% of your income? Could you still afford your home? Quit complaining and asking for your piece of the pie... your piece is the fact that you still have your job.

    February 18, 2009 at 2:39 pm |
  21. Carl Dobbins

    I see that the help for homeowners is only for customers of Fannie Mae and Freddie Mac. Both are failed organizations bailed out by our tax dollars. What kind of money from them was donated to our congressmen for this special treatment? Where's the help for those of us not mortgaged by Freddie and Fannie?

    February 18, 2009 at 2:38 pm |
  22. Randy

    My rate jumped to 11%–i could not afford it and my finance company refused to work with me even though i am 150,000 upside down–the house is up for a short sale and it will forclose on May 1–should I stop the short sale and see if they will work with me now–Thanks

    February 18, 2009 at 2:38 pm |
  23. Bob NY

    I just don't know what this is going to do for me.... the guy that actually struggles to pay his mortgage every month and just barely makes it while oil and property taxes get higher every year.
    If Obama really wanted to stimulate the economy he should have told all the banks... hey..we'll bail you out, but you have to lower everyone's mortgage rate to 3%. That would put real money in everyone's pocket every single month. Money for us to spend as we wished.
    If the banks refused to do so, then they don't get bailed out.

    February 18, 2009 at 2:37 pm |
  24. Jenise, CA

    I dont know if this new Homeowner Affordability and Stability Plan is really going to help homeowners that much. Even if the lender does try to mail information to the borrowers, it will be overwhelmingly difficult to get in touch with the lenders. I was personally in the same situation as most of you several months ago. I was falling behind on my mortgage due to a loss of income and was stressed out about what I should do. I have attempted to contact my lender several times and got no where. I finally turned to this 3rd party company called Modify Loans Inc. I found this company online at ModifyLoans.com. I began working with one of their agents that was extremely helpful. He even advised me of my rights to represent myself directly with my lender. I then told him of the headache that I had trying to modify my loan with them. He then took some basic information from me to determine if i was even eligible. Since then my loan has been modified to a much lower interest rate and my payment was cut almost in half!!! I think that if people dont want to risk waiting until march to just "see what happens" and want someone that can take care of all the negotiations, the long hold periods of trying to contact the lender, and knowing what to look for to qualify; they should definately contact this company or at least one like it.

    February 18, 2009 at 2:37 pm |
  25. TBrown

    I agree with MJ Westerlund...
    we bought a modest house, within our means – and nearly five years into it...I lost my job. Always paid our mortgage on time...and the double whammy...not only did we go down one income, but homes around me starting popping up for auction. So I'm owing about $30K more than my house is worth...
    say what you want – but you can't pick your neighbors – and you can't control your circumstances.

    I am hopeful that my family can, for once, actually receive some help...

    and cygnus – we DID plan for a rainy day...but with our resources drying up – and work really hard to come by – some hard working people actually do have their backs against the wall...

    February 18, 2009 at 2:27 pm |
  26. nam

    I was laid off last May, but we didn't get into trouble. Why? because we were saving, renting an appartment for 25% of one (not combined) take home check, not having car loans or credit card payments. Living within our means. yes, we are in a recession, and some of us have been or will be lay off. Guess what that's part of planning for your financial well being. My husband and I have more than one year expenses saved because it was pretty clear what was coming with house prices shooting to the stars. House prices need to come down so middle class can afford a house and save (for retirement, college, health expenses, unemployment...) at the same time.

    I have a solution I could live with. Anyone bailed out by the government (including CEOs) should work 400hours a year for several years for the tax payers for free. One day a week every year, doing any task they can do (from paperwork to construction) and at least they will be a lower bill to be paid by future generations. If you want a bail out, work for it!

    February 18, 2009 at 2:27 pm |
  27. Jeff Vogel

    Unlike some members of government, I have always paid my fair share of taxes and have never missed a mortgage payment on my home. Where is my "incentive" (up to $5000) for my good behavior of never having spent more than I earned which enabled me to make my monthly mortgage payment on time????

    February 18, 2009 at 2:26 pm |
  28. Rob

    here's my idea for a bailout. families in foreclosure get a check for one year's rent for their neighborhood. anything of value in the house is auctioned off by the salvation army, then the house gets razed by contractors hired by the gov't. bingo...instant reduction in inventory props up the value of homeowners who are paying their bills. and the foreclosed people get a full year to get their life on track and buy a house they can afford.

    February 18, 2009 at 2:26 pm |
  29. The Greatest Depression

    I still haven't seen anybody answer the question "Why does somebody else deserve the money I made more than I do?"

    February 18, 2009 at 2:26 pm |
  30. Ro

    I lost my job, what if i just filed chapter 7 and we are still having difficulties paying our morgage do I still qualify for help?

    February 18, 2009 at 2:26 pm |
  31. Renting in CT

    Andy repeats a common sentiment: "This recession is indiscriminate on who it takes down. There are many people who played it straight, saved, planned, and through no fault of their own are now unemployed. "

    While this is undoubtedly true, it illustrates part of the problem with this bill. It doesn't know what the problem is, and doesn't know how to fix it. Is it to stimulate the housing sector? Is it to end the recession? Is it to keep current home-borrowers in their mortgaged homes?

    Keeping people in homes that they can't afford – for any number of valid or irresponsible reasons – is not going to pull us out of the recession. ANY government meddling in the market skews the natural market behavior. And rarely in good ways.

    Want to stimulate the housing sector? Let prices fall, make credit available to good risks, lower the tax burden on buyers, and let the buying frenzy begin.

    It is very sad that some made responsible choices, and yet in danger of losing their homes due to illness or loss of a job. That is life, always has been. God doesn't grant us promises of eternal comfort. The government can and must provide a baseline safety net for these situations. A mortgage bailout goes far beyond that.

    February 18, 2009 at 2:25 pm |
  32. aaron

    Doesnt help me with my scenario. First off I did NOT go over my head and I have paid my mortgage on time and well within 25% DTI. I bought a condo in phoenix for $140k and put 15% down in 2006. So according to Obama I cannot get in because i now owe 123K and my place now appears to be worth $112K which is over the 105% max.

    That part is truly stupid and I dont understand. I am willing stay here and pay the mortgage no problem either way but why cant I (being responsible) get in on this due to the 5% limit?

    There are TONS of people here in AZ, NV, FL, and CA who got traditional 30 year mortgages and didnt go higher then we can afford. But have now suffered thru a FIFTY PERCENT DROP in the price of their home!!

    Someone please tell me y we are the ones to be hosed while people who did interest only ARMS should get the help?

    February 18, 2009 at 2:25 pm |
  33. Brian

    We were told that we had to delay the digital TV conversion because too many people had yet to convert. (Despite two years of warnings)

    They can tell us how jobs the economic stimulus plan will save/create.

    They can tell use how many homeowners will be help with the Homeowner Affordability and Stability Plan.

    Can they tell us home many homeowners facing foreclosure have $50+ DSL and/or $100+ cable bills? (Cable and satellite companies are reporting low churn rates).

    February 18, 2009 at 2:25 pm |
  34. A. Walden

    I'm presently in foreclosure of my first home. My orginal lender was Peoples Choice Home Loan, Inc. who then in turn sold 80% to Homecoming Financial (a subsidary of GMAC – adjustable rate loan) and 20% to Litton Loan Servcing ( a balloon loan).

    It was not until summer last year I received a notice from Homecoming that my interest rate was being increased in September of 2008. I was barely making ends meet before then and with the rate increase it became simply impossible considering the obstacles I was dealing with (mom sickness).

    I've tried over and repeatedly to seek assistance and in late November a friend advised me to call HUD. In dealing with HUD I found out about the balloon payment. I kicked myself over and over for not reading the fine print because as it stands the seller Battle Properties should have never negotiated the sale of this house according to the details of my financies and the loan requirements.

    I was so happy to have a first home but now it's so much misery my health has been affected along with the jeopardy of my job.

    Homecomings says there dealing with it but now since President Obama made the announcement today I'm wondering whether or not Homecoming (the most difficult servicing lender) will even adhere to the cry of help according to the new legislation.

    Please advise what can I do to ensure I get the proper and best advice to proceed in securing my first home? Thanks.

    February 18, 2009 at 2:25 pm |
  35. Ken

    While I understand the gravity of the situation I have a hardtime swallowing this. While my wife and I want to buy a home we realized that our past credit issues and the parameters of a sub prime loan were not in our best interest.

    Now I wish we had jumped at the O down bandwagon.

    If you signed the paperwork and did not understand what you were signing or bought a home that should have been out of your reach you deserve to be foreclosed!

    Shame on me for being responsible and insisting on raising the standard 15-20% downpayment before we entered the market.

    Now that lending has been constricted and I'm sitting on 15G I can't even step foot in a bank to ask for a mortgage.

    When do I get some help making my dreams come true? I'm sitting on the sidelines while those that shouldn't have even thought about it are getting assistance. BTW...I realize that not all of those facing foreclosure fall into this category but it is a huge chunk.

    February 18, 2009 at 2:24 pm |
  36. G

    I bet everyone who is blogging here and upset with this plan voted for Obama. Well, deal with it, you all voted for him, how am i judging this, because you are on CNN not Fox. Btw if i was eligible to vote, i would have voted for him as well, as there was no better choice. But its very clear in US you are paid when you make stupid mistakes and not punished. Would you give money to our kid to go to Grad school when he never completed high school, this is what is happening here.

    February 18, 2009 at 2:24 pm |
  37. Jeff

    Hope. Change. Rewarding Irresponsibility.

    The message is loud and clear. Pay your bills? Still working? Those that don't are coming for your money.

    February 18, 2009 at 2:24 pm |
  38. George

    This looks like a plan put together by HARVARD Graduate. Which means.
    This program works on paper, but does not work in reality.
    Houses lost 20-60 percent of value, so pretty much, no one qualifies. WHAT IT DOES is: strings people along so they keep paying their mortgage until they finally snap or another program comes along, which most likely will string them along more time. Finally, people will get it an stop paying as they have been doing.

    February 18, 2009 at 2:22 pm |
  39. Chip

    I lost my job last Fall due to the economy, but thank the Lord I got another one rather quickly; albeit at only two-thirds of my salary at my previous job (where I was working when I got my mortgage). For all of those sitting in judgement, I am affected by this mess and am struggling to pay my mortgage with fewer take home dollars. In fact, I am behind on my mortgage. I am hopeful that I will benefit from this. There are many more like me - working new jobs for less money. It's just the beginning.

    February 18, 2009 at 2:21 pm |
  40. April Moore

    It sadens me to see all the complaining about President Obamas Plan. Most want to know whats in it for me>>>>>> Can we stop and support our new president? He is doing what it takes to stop the bleeding of our economy. President Bush spent 10 Billion a month for the Iraq war...

    Let's give Our President a hand by helping our neighbors. Let's take off our gloves and get to work at supporting instead of trying to tear things apart.

    Preident Obama is doing good things. It's unfortunate that A FEW people who always cry that the sky is falling seem to be more destructive when there is so much fear. I want the United States to Win. Let's stop the bickering and SUPPORT OUR ELECTED PRESIDENT OF THE UNITED STATES.. Remember fear is
    FALSE EVIDENCE APPEARING REAL..... Remember the days of the Bush Administration who promoted this type of fear everyday. This country is the best country to live in... So In my opinion if you can't support the positive then stop telling everyone your opinion. We as Americans can do what ever we set our mind out to do... Amer i Can.

    Blessings to all

    February 18, 2009 at 2:21 pm |
  41. Michael

    I played by the rules and home prices rose 200% thus I was priced out of the market. So let me get this straight, those that did not play by the rules brought anyway and are going to be allowed to keep homes they could not afford in the first place. I am going to have to pay for those that did not play by the rules through higher taxes!!!!

    I believe the people that did not play by the rules are in the minority. But listening to the MSM, our corrupt politicians and Obama you would think it was the majority.

    Thanks MSM, our morally bankrupt congress and Obama from screwing me out of a home again and having me pay for the misdeeds of others.

    February 18, 2009 at 2:19 pm |
  42. me

    Please keep in mind that many people needing help did not necessarily make 'stupid' choices as so many of you are pointing out. Things happen. A spouse dies, an unexpected layoff occurs, a child can become very ill, etc.

    Sometimes when person gets laid off from his job he has to take a lower paying job. He may even have to use his credit cards to help out while he's looking for a job. Then when he uses his cards, the credit card companies raise his rates and double his minimum payments making it impossible for him to pay his bills.

    I have seen this happen to someone very close to me. This person bought a house for about $117,000 10 years ago, was making about $66,000 per year, and had his credit cards paid off. He was laid off 3 years after the purchase of the home. After the layoff several years ago many of the things mentioned in the previous paragraph happened. He had to use up his savings, used credit cards, etc., finally refinanced his house a couple of years ago, and now he's struggling with 2 kids in college. His spouse died 20 years ago, so he had been doing a great job supporting the family. He had to take a lower paying job and is now working 3 jobs. This guy was not living beyond his means, Y2K happened (IT employee) and he has never recovered because the credit card companies bumped everything up when he started using them. He always paid on time too.

    Life happens. It could happen to any of us. Consider yourself fortunate if you never fall into a bad situation. I work for a well known national company, but I never know when I'm going to be laid off. I can't sell my house in today's market. So I'm just trying to be as prepared as possible.

    February 18, 2009 at 2:19 pm |
  43. kjf

    Losing a home affects everyone. I am in foreclosure with three kids and a husband who has a terminal illness. It is very difficult to tell your kids that they may be homeless in a few months. We have tried, worked very hard, we are educated and also dedicated to our family as well as our community and we are still failing. Obama gives a lilttle bit of hope to those who are in my situation as well as those in worst situations. I am not asking for a free government hand out, but a little help to keep a roof over my children head as well as peace on mind.

    February 18, 2009 at 2:19 pm |
  44. Yan

    I don't see how this plan will help people who have lost jobs and have no income to pay mortgage even they can refinance. How long will this program last? Until the end of this recession, until most people are back to work? If you were a lender, will you lend to someone without a steady income? That's how we ended up in this mess in the first place.

    I hope this plan will work, but I don't think so.

    February 18, 2009 at 2:19 pm |
  45. Ron

    Homeownership – the great American dream!!! WHY?????

    February 18, 2009 at 2:18 pm |
  46. Lisa

    I'm probably not going to benefit from this plan, directly. However, there is no point in whinning about helping others. Most of the people who are in danger of loosing their homes at this point face the risk through no fault of their own...simply the ripple effect of this recession. Most, if not all of the irresponsible borrowers have already lost their homes and will be kept out of the market for years to come. I for one am glad to see that help is coming to my neighbors who need this so deperately. And, in the long run it will bring up home prices for those of us who are over/under, but current on our loans. Another added effect is realizing less blight and crime in our neighborhoods due to vacant houses that continue to bring down the value of other homes. Never mind the fact that the taxes paid by homeowners who keep their homes pay for schools and other community resources, e.g. police and fire protection.

    Is this a perfect solution? No, probably not. But, it is better than doing nothing. And, I find it so depressing that as a society we want to bash those that are down instead of offering a hand up.

    February 18, 2009 at 2:18 pm |
  47. Saudi Prince

    Stupid Americans! My royal family owns most of your country now anyways from oil sales,so quit your whining until we make you move into
    our deserts.
    Saudi Prince

    February 18, 2009 at 2:17 pm |
  48. ShuttleWorker

    Angel Smith February 18th, 2009 11:43 am ET

    "Is there anything out there for someone who lost their home due to foreclosure?"

    Angel...There are apartments in my building for rent.

    Mac, Houston February 18th, 2009 1:49 pm ET

    "Every American deserves a home. It’s time for the taxpayers to step up and make this happen. This is America where everyone is suppose to be equal"

    Mac.....Move to Venezuela

    The rest of you expecting your government to help you out......Wake up....It's not their job to support you and fix your woos. Though they seem to have decided to take that role lately....It'll end up costing your freedoms in the end.

    February 18, 2009 at 2:17 pm |
  49. Chuck F

    I need to review the details more closely, but this plan sounds like a joke. If we are in fact planning institutionalization of cram downs, that is the ultimate slap in the face to those of us in the silent majority that do the right thing. I have lived my life attempting to be responsible. I work hard, pay all my bills on time, and bought a house I could afford (with over 20% down).

    This plan sounds like it is a reward for behavior opposite mine. If I undertsand this correctly, I should have bought the $1M home I couldn't afford , instead of the 500K home I could. Then I could have filed as inacapable of paying for this excess, and had the government reward me by forcing my lender to reduce my principal owed.

    As Americans, we need to say, ENOUGH IS ENOUGH. I am fair-minded, and more than willing to do my share to help a fellow American through a hard time, however I can (I think I'm doing my
    "Patriotic duty" already, Joe). I am supportive of helping worthy people in hard places to get a fair market load as opposed to an intolerable balloon or ARM, but Cram-downs are just flat out wrong. The concept of rewarding irresponsible behavior at the expense of those that have lived their lives by making responsible choices and doing the right thing is just simply wrong.

    Chuck F

    February 18, 2009 at 2:17 pm |
  50. Bob, Chicago

    Typical, we are once again paying for someone else's mistakes. We have worked hard to get where we are at, but the new trend is to mooch off the hard working middle class people who are responsible.

    It is all about GREED!!! Sell, sell, sell, worry later. It is sad that our society can't live within their means and has to have all the gadgets and such to make them feel better. Sad days ahead in the the U.S.

    February 18, 2009 at 2:16 pm |
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