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. Rudy

    I'm glad as Americans we can sit around and blame the everyday people or as Obama puts it "we are a neighborhood people"! Well i guess it's a gated community neighborhood, this don't help anybody but the well off folks! I guess no one read all the articles over the pats ten years on how if you don't buy now you will never own a home! No one invested badly they took bad loans becasue they were offered in a way that made sense at the time. Remember every article written was about how owning a home will be out of reach for the average family all suported by the media, every developer, realtor and every states department of realty! We thought we would never be able to afford a home back then now you can buy one for what a house cost in the 70's. We got robbed by banks, our government and realtors and how do we repay them by bailing them out! I say there are harder restrictions for the modifications then there are for the bailouts. All the politicians friends are getting thiers. I think we should boycott every orginization that recieved bailout money till they drop to their knees and make things right! Everyone wants to blame the everyday people because we are the problem, right? Look very closely at your family and tell them in ten years they'll be in the same position we are cause if we don't help every American that's their future!!

    February 18, 2009 at 4:03 pm |
  2. JV

    Most people are very frustuated. I see that most blame the people who lived beyond their means. Yes, people bought expensives house, they only did it because the banks were willing to lend money. The people in charge of our tax money should have been watching the banks and should have NOT ALLOWED them to lend money irresponsible. It is not the people fault, its the business. During the time that we were buying houses we helped the economy grow. Yeah, it was a superficial p[rosperity but no one tried to stop it then, so why complaint now. All we can do is fix it. We are going to have loosers and winners. If we let the real estate industry continue to decline we can face more serious problems.

    February 18, 2009 at 4:03 pm |
  3. Randy Miller

    OK, to all of us who have been responsible, good for us. But right now the bubble is deflated to the point where houses in most markest are priced reasonably. But if we don't stop the downward spiral, even we will be upside down. Assume that you might want to or have to move in the next year. Maybe you lost your job, and found a new one 200 miles away. You need to sell your house, but with the mortgage market in its current state, you can't, and you can't buy a new one near your new job because you cannot get financing. We have to stabilize the market for ALL our good.

    Nothing like a little economic stress to make us forget we are all in the same boat together. Part of the social contract is to help each other out, and then if someone takes advantage, deal with the individual.

    February 18, 2009 at 4:03 pm |
  4. Charlie Light

    What President Obama's team is trying to do is establish a new floor on housing prices by arresting the acceleration of foreclosures which drag down the market value of all others. In this goal, they are right. The plan however, trips right over moral hazard by insufficiently penalizing borrowers and lenders who proceed with a write down. Lenders should be penalized by having Fannie and Freddie (really the US Treasury in disguise!) buy the revalued loans at 90% of
    the new value. Borrowers should be penalized by having all equity wiped out and perhaps an automatic penalty applied to their credit score (not sure how to do that). Refinancing borrowers must also submit full financial documentation, no more fraud. This is needed to ensure that all parties who participate do so only because it is their "least bad" option.

    February 18, 2009 at 4:03 pm |
  5. Sharon

    We started building a home at the end of 2006. Due to a serious illness and death in the family, we were not able to put our present home on the market until early 2007, just before the bottom fall out of the housing market. Our new home was completed in May 2008, since then we have been paying two mortgages and second on our present home. The mortgage on our new home is an interest only loan. Our old home will not sale , we have dropped the price to reflect the current market, and the house still has not sold. It's like our financial lives have been frozen by the housing crisis. Will this new plan help us, before we have to foreclose on one of our homes?

    February 18, 2009 at 4:02 pm |
  6. left out

    My home has dropped $100k in value, I have to relocate because my company is moving and this is no the time to say no and look for a new job. I can't sell my home, renting won't nearly cover the payments, taxes/ and I can't get any help under Obama's plan because the home will no longer be my primary residence. Oh well, I guess another foreclosure into the market. Thanks Obama!

    February 18, 2009 at 4:02 pm |
  7. Dusty Kaye

    Ginny Grieco and any Chase Home Finance customers needing modifications or refinance.

    Working with Chase can be very difficult and takes grit and perseverance.
    For help and information, I found the forum here: http://www.loansafe.org/forum/index.php to be very helpful.

    – D

    February 18, 2009 at 4:02 pm |
  8. John Smith

    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.

    This is a joke.. how many investors will simply move into one of their block of 4 (or more) properties and suck off the teat of the taxpayer.

    These clowns got into debt well beyond sensible risk measures... why should I spent the rest of my life rewarding them ?

    Let them have a fraction of mortgage relief (1/number of units) and not the whole deal. How hard is the maths to be fair Obama ?

    February 18, 2009 at 4:01 pm |
  9. Teri Milbourn

    Ginny – my condolences on the loss of your husband. My sweet husband passed away last year, also, so I know how scary our current financial crisis is – people like you and I have no one to turn to. This bailbout plan stinks! Because people like my husband and I chose to buy a modest house within our means and have kept current on all our bills, I now get to work my butt off so my tax dollars can pay the astronomical mortgage of my fancy-schmancy country club neighbors who don't know what 'self-control and restraint mean.

    That's always been the way of this country – the salt of the earth, normal, hard-working people end up supporting the poor AND the rich.

    February 18, 2009 at 4:01 pm |
  10. Reality Check

    Hmm... I haven't found the part of the US Constitution or the
    Bill of Rights that states "All residents of the USA shall have
    a home and a job".

    Can anyone point me to that?

    February 18, 2009 at 4:01 pm |
  11. No 2002 tech stock bailout!

    Money is money. Buying a home that has tripled in price in 5 years is no different than buying one of the internet stocks in 1999 that did the same boom and bust cycle. Did the govt bailout everyone's 401ks? Of course not. That would be ridiculous just as a homeowners bailout is now. All this is, is buying at the top of the cycle and not accepting responsibility that you made a mistake when the bust occurs. Take responsibility.

    February 18, 2009 at 3:58 pm |
  12. Soccer Dave

    What a screw job! I'm tired of giving money to the corporations and individuals who make bad decisions! Let GM fail, let the homebuyers who bought homes they couldn't afford get foreclosed, let the banks who made bad loans go under!!! The country will come back, we are just postponing them going under and getting more in debt. If you really wanted to help the country I say mandate that the federal government will lower their mortgage interest rate by 2% on all current loans for EVERYBODY with a mortgage!!!

    February 18, 2009 at 3:58 pm |
  13. bj

    Just the same thing alot of others are writing about-I am current on my mortgage-I didnt buy a house that I could not afford-Where is my BAIL OUT? Why are we having to pay for others?

    February 18, 2009 at 3:53 pm |
  14. Mark

    Archman –

    Why did those people get into loans with such high interest rates, and why should I have to help them out?

    February 18, 2009 at 3:52 pm |
  15. Mark

    Archman –

    Why are there people out there struggling with an interest rate that is ridiculous by todays standard and can not refinance because of bad credit?

    Why did those people get into mortgages with such high interest rates, and why should it be my problem?

    February 18, 2009 at 3:49 pm |
  16. Crista

    Wow, it's like America is our mommy and we are the screwed up teenagers and mommy is going to fix everything.
    If this does not show that American society is going down the tubes, I don't know what does. Americans need to grow up and stop acting like spoiled teenagers.

    February 18, 2009 at 3:49 pm |
  17. haha your paying my billz

    I think this is a great plan! I haven't paid my mortgage in over a year and now I have more money than anyone that I know. And now i get to keep it and pay way less than I used to. I hope they lower my balance so I can sell it and make some more money! Obama is the Man!


    February 18, 2009 at 3:48 pm |
  18. KIM

    I'm so sick of judgmental people who have no clue of a persons circumstances before they jump to the conclusion that EVERYONE in the predicament of being foreclosed on is in it because of irresponsible decisions!!....There are many reasons a person may be stuck in an unafforadable mortgage now. Job losses are increasing by the 10's of thousands daily!...and those who are fortunate enough to still have a job are suffering from decreases in pay, increases in health care costs, etc..The entire economy is in an uproar, so

    February 18, 2009 at 3:47 pm |
  19. Kel

    My husband and I purchased a home 15 years ago when we both had very good incomes and steady jobs. Recently my husband was laid off from a job where the company was downsizing. We made every payment that we had until this happened. I could barely afford gas, food, childcare and utilities with my steady paycheck. Mind you we could afford the home when we purchased it and continued to put savings away in case of an emergency. The loss of his job was our emergency and savings was gone pretty fast. I am not complaining because the bad economy effects everyone of us who works and tries to survive day to day. Our home was forclosed in December and there were countless times I called Countrywide and tried to work out a plan. The only thing they offered was to tack the amount owed to our regular payments. What about the hard working individuals who could afford there homes when they purchased them and lost there jobs and home due to the economy? Although our lives are getting a little better because he has a new job, but this has ruined my credit and I won't be able to buy anything for 7 or 8 years. I just wish if the help would have been given it would have considered more peoples circumstances than what it did. Not all of us purchased homes knowing that we couldn't afford them.

    February 18, 2009 at 3:46 pm |
  20. Sheila

    Well I hope all of you self rightous people do not find yourselves without a job. I was on severance for 3 months, on unemployment for 6 months and working part time for 6 months to end up finally getting a job in a new field making 1/2 as much. You let me know if your savings keeps you afloat for that long. Don't tell me about making hard choices. I had to give my car back to the bank to keep my house, even after the bank modified it. I have to feed my kids. I am glad that the Prez is at least thinking about this and trying to help.

    I didn't buy a house outside my means. I bought the cheapest, smallest house in a good suburb of Chicago. I am thinking of my children, their education and their safety. We are real people, not just the faceless you find so easy to hate. I say hate because the way you talk, you don't care. We deserve what we get, right? Do I deserve to loose my house, my car & my animals? Do my children deserve to be disappointed and have to move from their home? Changing schools and trying to make new friends, and under the stress of this devastation? I didn't make a bad decision to buy my home. I had money saved. The bad decision I made was ever believing that I was untouchable that I went to college and worked hard and it couldn't be taken away. That I was on my way to the American dream and true happiness. Do you think you are untouchable? Look around you carefully. Think it can't happen to you? Think again. So be careful what you say and do, it might be you next, or your Aunt or your best friend from 3rd grade.

    Keep telling yourself what you need to in order to sleep at night. Remember though, how would you want to be treated if this happened to you?

    February 18, 2009 at 3:45 pm |
  21. Marc K

    All of you who voted for The Chosen One:

    You are now complaining about why you should pay for someone else who is in default when you played by the rules when it came to buying your house.

    You are looking for your deal to refi, get a lower interest rate, or even sell. You cannot do any of this because your house is not longer 'worth' what it was.

    You asked why Bush gave bailout money to the banks who were failing because they gave out the bad loans, then refused to lend.

    But now TCO is giving even more money to banks who are not lending and companies who are laying off thousands, and no one asks why he is spearheading this disasterous recovery plan.

    Welcome to Socialism where you get rewarded for screwing up, and get screwed for playing by the rules!

    February 18, 2009 at 3:45 pm |
  22. PEB

    Let me get this straight. I lied about my income. I lied about having a job. I lied about my saving account. I lied about my assets but I still was able to purchase a house without a downpayment. Do I qualify? Oh I forgot, I don't speak english and I have a fouth grade education. Where do I sign up?

    February 18, 2009 at 3:43 pm |
  23. Archman

    All you who are sitting ok or good – and are complaining – quit your whining. Consider your self lucky because your time may very well be coming. There are people out there struggling with an interest rate that is ridiculous by todays standard and can not refinance because of bad credit. Before they lose their house – give them the 5% mortgage and the opportunity to hold on. By providing this lower rate opportunity – with some creativity – they may be able to hold on. On a 150K mortgage – every point saved equates to almost $100 per month savings. There are people out there who could easily drop their payment by a minimum 3 points saving $300 dollars and be able to afford the house. This should be a no brainer but these mortgage companies would much rather foreclose. About time the US helps their own for a change – make it work.

    February 18, 2009 at 3:41 pm |
  24. Nattira

    In 2006, we bought a brand new home in San Jacinto, CA for $395,000. We put 20% down (80k). Our loan was originally $315,000. We currently owe $305,000, but is only worth $225,000. There are as many as 8-10 foreclosure homes in this housing development section. Our loan is a 30 yr. fix, with 5.875% interest rate. Our jobs are pretty secure. Our total gross income is 150k combined, annually. Our FICA score is 750. Our main concern is that we owe far more than the home is worth, even after we have been making payments faithfully and responsibly and with 20% down payment. Will there be any help available to us under the President's Homeowner's Affordability and Stability plan? Will the lender lower's the principal accordingly if we are not qualify for a lower interest rate? In addition, with the California's budget crisis, we will be the same hardworking people who are forced to pay 5-6% increased taxes, if the state budget get passed. And yet, our daughter does not qualified for any college financial aid because we're making too much money.

    February 18, 2009 at 3:39 pm |
  25. Phyllis

    Thank you for the insightful information! I am always impressed by your knowledge, professionalism and candor. I do have the desire to help those who are truly victims of unfortunate circumstance i.e. layoff from a job, loss of a spouse, etc.
    However, when I see a friend of mine behind on her mortgage frequently spending money going to the hair salon or going out drinking I do not wish to help her nor her family. My husband and I live rather frugally to afford the occasional dinner out or item for the house. We do not take money earmarked for bills to go to the hair salon or go for a night on the town. In summation, before we decide to help people "save their homes" their spending habits and their finances should be carefully scrutinized.

    February 18, 2009 at 3:39 pm |
  26. harve weltman

    at the present time i am currently current on my debts...but am losing my income except for social security..my home is upside down and i have credit card debt...if i file for bankruptcy will this effect my filing for a loan modification or reduction...at the present time you must be 2 months behind on mortgage payments to be eligible...h4h but again does filing for banruptcy effect my qualifying thanks hweltman

    February 18, 2009 at 3:39 pm |
  27. Jakanam of Atlanta

    My primary residence is paid off, so I have no mortgage on it. I however have mortgages on three rental properties. Would it make sense for me to refinance my primary residence, take the money out and pay off the the mortage(s) on the rental properties? Is there a financial benefit for me to do this under President Obama's plan?

    February 18, 2009 at 3:36 pm |
  28. Brian

    I'm not sure all this anger is helpful. This "I didn't get help why should you" or the "I'm not in trouble and lived within my means and therefore you didn't and deserve to lose your home". Who does that help?

    I'm at risk of losing my home. Wife lost her job 8 months ago. We waited until Oct 2007 when the market was down 10% but eventually (we're nearly 40) you have to get in the game or be too late for a 30 year fixed which is what we have. Was the payment a bit high on one income (100K)? Yes, but what do you do? She had a good job and everyone back then was optimistic, or don't you remember?

    Even then – with some help my lender will be whole. Reduce the interest to market rate (that I can't get now b/c I am 4 months behind). Roll the balance back into the loan. Just a little help is all we are asking for. And it's good business. Not even asking to have help on the loss of value of the home – that's the risk I took on.

    Finally – remember these mortgage companies charge interest and take on risk as a business model. So stop acting like the terms are the terms and either pay it or go bankrupt. That also helps no one and is not in line with capitalist business either.

    February 18, 2009 at 3:35 pm |
  29. Aaron Davis

    Look – for those who are complaining.....

    My wife and I bought a house we could afford in 2005 with a decent interest rate. We don't need help now – BUT if my wife loses her job later this year, we certainly will as my income won't cut it.

    There are circumstanes other than people buying homes they cannot afford. You could lose your job too – then what???

    February 18, 2009 at 3:34 pm |
  30. Shawn-Tx

    At the end of the day, bad decisions have a cost associated to them that MUST BE PAID. Question is, who pays. Can any of the liberals out there explain to me why a government that limits individual accountability is better than a government than relies on individual accountability? What kind of financial system can function long-term with no individual accountability?

    Re: I'm not a liberal but I can explain it to you. Just read Obama's comments. Nobody really cares if Jo-Blow buys a new house he can't afford then can't pay for it so he's kicked out. We start caring when half the neighborhood gets kicked out of their homes and the banks start going broke and now the good guys can't get a loan and the people who have just finished paying their mortgage off see their home's value cut in half. I guess we could just let everyone suffer through it and tell them to make better choices next time, but their may not be a next time if we don't do something this time. Good enough?

    February 18, 2009 at 3:34 pm |
  31. realistic

    I purchased a home several years ago and have watched the value stagnate and perhaps decline a bit. I have never missed a payment and will not benefit from this plan, but here is why the plan is necessary – whether or not you think it is FAIR.

    Let's say 25% of the people on your block end up in foreclosure and their houses go back to the bank. That will drive up the supply of houses for sale and the bank will likely sell the foreclosed houses at auction for a deep discount. When you (responsible bill payer) go to sell your house, you will find out that the only way to get any attention is to lower your price to meet the market which has been depressed SEVERELY by the massive supply of bank owned homes on the market. In fact, you might even decide to just leave the house to the bank because you will never realize enough from the sale to pay off your loan even though you were responsible and put 20% down when you purchased.

    So while I agree that the plan is not necessarily FAIR, I don't see a better alternative, and I feel that in the end it benefits all homeowners.

    February 18, 2009 at 3:33 pm |
  32. Faith

    I'm a divorced single woman who part of my income is from permanent alimony. My former husband is a 55 year old man with a Maters in Business & Marketing who is currently umemployed. He's applied everywhere for over a year and can't find work. For this reason, he can't pay his alimony obligation, which I depended on to pay my mortage. Due to this decrease in my income, I am now behind on my payments. I did all the right things. I bought a townhome I could afford with a fixed rate, $20,000 down. Now I owe more then my home is worth and could possibly loose my home that I planned to retire in. I hope I will be eligible for the foreclosure benefits. I don't won't a hand out, just some relief so I can keep my home until things get better then I can pay back what I owe. I do think this situation will get better hopefully sooner then later.

    February 18, 2009 at 3:30 pm |
  33. vera,illinois

    we have had my home now for 13 years,we have made improvements a little at a time,we don't have a mansion or live beyond our means,we have had a decrease in hours at both our jobs,currently looking for another to supplement our income,no luck yet,and are facing foreclosure,so what should we do move into a cardboard box before asking for help?placing blame isn't going to help anyone,the economy is hurting many,if not everyone.

    February 18, 2009 at 3:29 pm |
  34. sick and tired

    I have been waiting for years to buy my first home but home prices in the bay area have been outrageous increasing over 300% in some areas. I never saw the right time to buy because I did not want to take out a massive loan to pay super inflated prices. I'm no financial guru but unlike some people, I used my common sense and knew that prices could not keep going up. I watched on the sideline as people were financing 100% on a home at the peak of the housing bubble thinking that they would end up making tons of money without investing a single dime! Some people bought homes as investments with 100% finance and rented them out so they earn some extra income and then they would let the bank foreclose the property when it didn't make sense any more. Others took out equity to buy more property or fancy cars or lavish vacations. So why are we even trying to bail out these people? I have always lived frugally and responsibly and now my tax dollars are going towards bailing out the very people who contributed to the housing bubble with zero dollar investment or zero common sense? Why can't we just let the market correct itself without government intervention? Why must we burden our future generations with tremendous debt without properly setting examples of the consequences of living outside our means? I see a lot of loopholes in this bill and if we are offering to bail out the same greedy and/or illogical people who were only in it for the money or could not see this coming or did not have adequate emergency savings, then we are in trouble. Before all this free money, unfortunate folks who lost their jobs or could not keep up with payments due to unforeseen events did not get a bailout. Why must we get into bailouts now? The state of the economy will get worse but let's suck it up and let's get it over with without dumping anymore money into it.

    February 18, 2009 at 3:29 pm |
  35. enrique arroyo Portland, Oregon

    People have forgotten God and are more concerned about money, credit and material things. Did we all forget we still live in the U.S. and have benefits and dreams that no others could even imagine!! Shame on us for feeling sorry for ourselves when whe have everything and most of the world has nothing. If people would stop feeling sorry for themselves like the couple who KILLED THEIR CHILDREN AND THEMSELVES because they lost their jobs, this country might still have hope...

    February 18, 2009 at 3:26 pm |
  36. KLP

    Where is the GODLY Love !!!!

    February 18, 2009 at 3:26 pm |
  37. Scott in Michigan

    Shame on me for living responsibly. Shame on me for paying my bills timely, not living beyond my means. Shame on me for buying a house I could actually afford. Shame on me for educating myself about the mortgage process to make sure I didn't sign my name to something I didn't understand. What was I thinking!

    So, my house is now valued below my mortgage in this economic mess, but because I am a good paying customer, I have no options, but others can get a principal reduction because they don't pay their mortgage? Brilliant!!!!

    This so-called "HomeOwner Stability Plan" is an outright attack on the responsible citizens of this country. You now know why I didn't vote for Mr. Obama and his cronies. And for those who did – this is what you get. Thanks alot!

    February 18, 2009 at 3:24 pm |
  38. Renting in CT

    Just so everybody knows, I've been voting against banking comm. chairman Sen Chris Dodd (D-CT) for31 years! C'mon all you CT residents, I can't vote him out all by myself!!!

    February 18, 2009 at 3:09 pm |
  39. Ray Fisher, Albuquerque, NM

    I think first off the President should take the failed banksand reopen them as Preferred Customer Banks for people who follow the rules, have excellent credit, pay their bills on time and deserve the best interest rates and terms on all things and rebuild our banking system from that firm foundation upon which to strive because the time to penalize without reward is over. Our economy will rebuild faster with a firm foundation. Our retirees and others with good financial habits should be rewarded with a iron clad banking organization to foster stability.

    February 18, 2009 at 3:08 pm |
  40. Todd

    Look. My heart goes out to all of you that are suffering. Unlike most bloggers here I am not going to pass judgement. I have been where many of you are now. And even today things are not as good for us as they once were but we are admittedly probably better off than most today after being unemeployed, with no health insurance, BR, and lost our home just a few short years ago. All I I can tell you is don't give up. Things do get better. Most of the stories here appear to be from people that feel they got into their current poor financial situations through no particular fault of their own. I hate to be so direct but that is life. The bail out is wrong. We have mechanisms in place when these things happen including BR, foreclosure, and various Govt assistance programs not to mention your church and family. Take foreclosure for example. At least in the US if you are foreclosed upon the bank does not go after you for the difference. If we get into bail out mode where does it end. The postings here prove my point. Hang in there folks.

    February 18, 2009 at 3:08 pm |
  41. You asked for it!

    Tonya C, first off, yes I am scared of a "level playing field". That is the antithesis of the American dream. It rewards those who are content to be a drain on everyone else and undermines those who actually make a determined effort to improve themselves and society. If you are so content in living in some socialistic utopia where everyone is on an equal playing field, might I suggest the island country of Cuba?

    And regarding the "horrible, useless war" you speak, what do you know of war? Who made you the authority on this? I'm one of those children you speak of, currently on my 7th deployment overseas. I'm surrounded by thousands of fellow service members who do not view this conflict as useless (thanks for your support though...ha). It's a wonder that so many of us continue to do our job so effectively and willingly despite the media's and your anti-American attempts to belittle our efforts. But then again, you and everyone else in support of the bailout probably have never done anything else for the greater good...never been willing to put your life on the line for something bigger than yourself. Unfortuately, society is filled with too many people such as yourself who share this pervasive selfish attitude.

    February 18, 2009 at 3:07 pm |
  42. Larry

    What about those of us who exercised the financial discipline to not buy a house during the go-go years? Now, instead of allowing the necessary Darwinian purge to occur, bringing back household pricing to its historical relationship with income, prices will remain inflated, and thus housing will remain out of reach? This is un-American.

    February 18, 2009 at 3:06 pm |
  43. morris diehl

    Since I live in California and there is about 7 foreclosed homes within 3 blocks of my home I am naturally underwater on this mortgage. Mind you thats after I put down $100,000 on a $500,000 home. Fraom the looks of this government plan I still will get screwed by the lender. You want to reduce my payment and not the loan amount. I think its safer to let the lender have it back and go by another home. I wouldn't think of doing this but it seems to me that the banks and the mortgage company's where more interested in screwing everyone instead of just the subprime borrowers.

    February 18, 2009 at 3:05 pm |
  44. Bill Joes

    What did you expect when we turned the country over to a community organizer. He appoints a tax cheat to run the IRS, and a political hack who is going to be in charge of the auto industry. I bet Putin is licking his chops!

    February 18, 2009 at 3:04 pm |
  45. steve Loudon, TN

    Now you are getting the picture. The MESSIAH is a phony and has led a lot of fools down the path to irreversible government control of their private lives. Socialism HA, this is communism on the edge. "from each according to his ability to those according to their need" . Generational theft is an understatement. Work hard, save, budget, deny yourself instant gratification and YOU ARE NOW THE SUCKERS.......We need to crash this system. The government does NOT represent Americans. They just do it for the power and money. Remember the tax compliance system in this country is voluntary. Let them try to make it otherwise. Local Assessment boards have already got plans to RAISE taxes in our area, despite falling values etc. I am advising everyone to contest their property taxes as this is the way they will continue to steal from us. If the rate of error or non compliance in tax returns goes from current 1% to 3-4% the government would cease to function. That would be a good thing in my opinion. I don't advocate breaking the law, but use it to your advantage. And get mad as hell and tell them we aren't going to take it anymore. You might be surprised how effective you can be at the local level. This is a watershed event in America. Failure is the beginning or rebirth....preventing failure is promoting it.

    February 18, 2009 at 3:03 pm |
  46. Janice

    I'm a responsible buyer/borrower who is as frustrated as everyone else like me.

    I have a solution that I'm somewhat more okay with:

    For people we're helping, let's look at the day of their loan origination and the terms of their loan. At the time they got the loan could they have afforded the worst-case scenario (a max rate on an ARM for example)? If their payment grew to that worst-case scenario, could they have afforded it at the time they purchased the house?

    If the answer is yes, then I'm more okay with helping because it means some other factor is involved in their difficulties now – loss of job, illness, etc.

    If the answer is no – that they couldn't have afforded the worst case at the time of closing – then they made a bad choice by not preparing for that possible worst case and shouldn't get help.

    February 18, 2009 at 3:03 pm |
  47. mcep

    My wife and I got married found a house we could afford worked hard and payed it off. we did not buy a house that was outside our means. we did not buy a house to keep up with the joneses. we bought a house that we could afford. Now why do we and others like us have to foot the bill for others over extravagance. It's not right! The lesson here is you needn't worry about being responsible and making responsible decisions . Go live outside yours means don"t worry if you can't afford it somebody else will pay for it. Thats a terrible message being sent.

    February 18, 2009 at 3:03 pm |
  48. Shannon

    I've read alot of these emails and I am disappointed. There are those who think no money should be spent on the housing crisis because they didn't "mess up", so why should they have to pay for it or their fine financially and don't see any upside for themselves. I totally see what your saying but, it seems a little short sighted, as if you advocate that we do nothing or increase our deficit to include a benefit for you. That means that you believe the economy is fine and we've experienced the worse of it but, the facts show otherwise. In fact, the economy is getting worse (you don't have to believe what I say, go look at the facts yourself).

    You should care because this crisis doesn't have to get bad enough to affect YOU. When people start losing their jobs in your district, aren't able to get a loan because of the amount of foreclosures on the books of banks in your area or your community bank is unable to get a loan from another bank because they don't have the capital and when people just start staying home due to cut backs, you'll start singing a different tune because you'll feel the effects. You'll be forced to adjust your life style through no fault of your own and guess what, they'll be no one to help you because by then it will cost to much money. You'll just be another one of the many other trageties. It's a shame that some of us must face foreclosure, bankruptcy, and job loss before they realize that something must be done.

    Where's your common sense? The economic crisis isn't going to magically disappear, something has to be done and while it may not help YOU, you need to ask yourself if you actually deserve help. I say all of this as an out of work sub-contractor who is going through bankruptcy and will pay for this down turn for years to come but, I recognize that I could and should have done better for myself and my family. I overextended and I had time and money to better educate myself and choose not to. So, I just look forward to a better day and I know it'll happen.

    February 18, 2009 at 3:02 pm |
  49. yada yada

    So if I help PAY for other people's mortgage...........does that mean I am PART OWNER of their property?? Only seems fair to me.

    February 18, 2009 at 3:00 pm |
  50. Don Dimarco

    My oh my have the righteous come out on their high horses!

    I don't particularly agree with the bailouts but I do believe something has to be done. It has a recursive effect and if the problem gets worse it will affect all of us...even the "responsible" people. I'm current on all my bills and mortgage, but, I'm praying I don't lose my job. I'm not going to talk down on the over 7 million Americans that have lost their job in the last year. My wife hasn't been able to find work anywhere even with a 4 year degree in Business. Not even a low-paying retail job.
    You can't blame people that are trying...people want to work. Let's just be grateful if we can say we still all!

    February 18, 2009 at 2:59 pm |
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