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. Dean

    to all you bottom feeders who bought more house than you could afford...interest only...ARM... 150% of value.....you ALL get what you deserve....the street. The only problem is now WE are all paying for your greed. I bought within my means, have a year's salrary in savings, rarely went on vacations, paid my children's college tuition, etc. What do I get? A home in a neighborhood with declining values. Thanks a lot! I am sick and tired of bailout this and bailout that. Let the market dictate what will happen, it ALWAYS corrects itself.

    February 18, 2009 at 5:37 pm |
  2. Jane in Oregon

    My husband has been self-employed in the construction field for 13 years and I have been a stay-at-home mom of our three children. We own a home, have no credit card debt and have a credit score of 791. My husband's very busy business has died down so much that he hasn't had work in 5 months. Luckily, we have a savings to pay our mortgage, but are going through that quickly. I'm starting a job in March, but it won't cover everything. We will still go under if my husband doesn't get a little something for work each month. We tried selling our house and had a buyer. We were willing to sell our house for less than what we owe to get out from under it. We were willing to walk away from the $50,000 we had put down on the house and say goodbye to all the money we had put into it. Finally, when we thought we'd be out of the home debt, the bank would not release the money to the buyers. We had trouble finding anyone to rent to us anyway because of my husband being in construction. We took our house off the market and tried to refinance at a lower rate, but we were told no lenders would touch us until our house was off the market for 6 months. There was one exception, but the loan could be no more than $270,000 and ours is. So...no help. I'm just worried there will be more cracks for us to fall through and again receive no help. We are able bodied hard workers who just want to work and pay for our home.

    February 18, 2009 at 5:36 pm |
  3. kerry

    You elect our actual resident of white House, and every body was happy and saying that we will have a CHANGE, there it ia you have a CHANGE.

    February 18, 2009 at 5:29 pm |
  4. Barbara

    My husband was raised in a one room house. I was raised in an alcoholic family. My husband worked hard ,earned good grades and was awarded a full scholarship to a good school. We chose the high road and took care of our family and bought homes we could afford. We saved money and lived below our means.. I am all for rewarding people for hard work and good decision making. Tax me for helping students who work hard with scholarships or job training, but do not ask me to continue to pay for those people who act irresponsibly.

    February 18, 2009 at 5:28 pm |
  5. Rob

    If I have an 80/20 mortgage, and the new plan only applies to the first mortgage, does this mean I am stuck with this subprime 20% interest only piece of junk line of credit?

    The 80 is fixxed and the 20 is interest only variable. I am current on my payments but might still be stuck in an unscrupulous subprime junk loan?

    When I applied, I was preapproved for a 30 year fixxed rate, went on to sign a contract with a seller and when I went back to the bank they said I had to use a different mortgage product. I feel like I got forced into this 80/20 by bank of america and cant tell if I would be eligible to go 100% 30 year fixxed via the new plan.

    February 18, 2009 at 5:26 pm |
  6. yvonne

    to Hildegarde,
    your lender is the pioneer of the mortgage of mass distruction. they are the most feared company known in the market. nobody will ???? them on their practices. i'd love to see the media do a story on them.

    Now about Palin: i saw a ticker that said she was going to pay her back taxes. those of you who! get to help our neighbors, think on that.

    obama is working on the problem that the last administration left us. otherwise, well ya kno! we could be watching family vids from the w/h
    if that administration continued. Hum-what a thought

    February 18, 2009 at 5:22 pm |
  7. emilia

    I own a house that I need to refinance because I need a better interest
    rate. I was never late with my payment and still has a good paying
    job for the pass 6 years. My credit is good but not enough that meets their guidelines. My question is, Why don't I qualify when my house payments are in excellent standings? Why can't they consider the fact
    that I make good money and can pay my bills. Can I not even get compensation for not being a "Free Loader".

    February 18, 2009 at 5:21 pm |
  8. zcruiter

    This plan ,along with the Porkulus bill just passed is the official death notice of the U.S. middle class

    February 18, 2009 at 5:12 pm |
  9. Kap55Tu

    I'll bet most of those offering these negative comments are good church going Christians or maybe they're the sharks that arranged the mortgages that people can't pay. Have they never known anyone down on their luck? Not everyone losing their homes over spent. And surprise .... not all these people are of low-income, or in a particular class you assume them to be in. Some may have lost jobs and either couldn't find re-employment or were employed for lower wages, suffered illness or disability, or some other unforeseen incident occurred. If you can't be compassionate or considerate, then at least be selfish and realize that if homes sit vacant in your neighborhood, your property values go down, vacant properties are vandalized and become eyesores or hangouts, the banks will continue to lose and need more money and more bailout tax dollars from you, and further failures may end up in a complete financial breakdown, all of which will affect each and every one of us in some way - maybe a job loss and then you'll need assistance and others will be talking about you in this negative way!!

    February 18, 2009 at 5:10 pm |
  10. terry

    Please call and email your representatives and tell them how you feel. Obama and his cronies are out of control. Remember this when election time comes around. Get the out. Cannot wait!!!!!!!!!!!!

    February 18, 2009 at 5:07 pm |
  11. Tom Davis

    The Banks & US Goverment are robbing the future.

    February 18, 2009 at 5:05 pm |
  12. Godhelpusall

    I don't know about your area but here in good old NH a few months ago a local newspaper did an article about the food pantries and demand being higher than it ever has been. The Picture in the article showed people in designer clothes, designer sunglasses, driving high end SUV lining up for free food! Barf ! My family doesn't have cable, my husband and I drive 8 year old cars and our 2 kids( all that was fiscally responsible to have) wear Walmart clothes. We might see a movie once a year and go to the Matinee. I know that there are people who have done it "right " and have been unfortunate victims of the mess our Government has created, but the Government continuing to do the same thing that got us into mess will not make it better. If our government keeps taking what some of us earn and giving it to those who want hand outs we will all loose. Why am I "Lucky" not to have been hit by a Truck – If I chose not to play in traffic?
    And Yes I understand that sometimes a truck jumps a curb and hits people on the sidewalk. Those people are innocent victims -Not the ones playing in traffic!!!

    February 18, 2009 at 5:05 pm |
  13. peg

    So how do I fit in when I lost my job in SC and am working In VA
    now they say that is my second home When its the only home I own!
    So does that make me not intitiled to any program?

    February 18, 2009 at 5:04 pm |
  14. lucy

    so, i have been paying on time for over 5 years, where is my $5000 off my debt?

    February 18, 2009 at 5:03 pm |
  15. Wow, and they call this the US.

    I never actually read through all the comments to articles, but these comments were so vicious, that I could not keep myself for moving to the next statement.

    Bush is the cause for all of this destruction. Obama is just the person that is trying to clean on the mess. Why is there such negativity toward a MAN who has agreed to step up and help ease the mess that the BUSH economy has thrown us into. Change sometimes requires time. In this case, it will require more than the short period of time that he has been in office. Can he get a fair chance? BUSH was allowed 8 years to put us in the worst economical situation since the 1900's. If you want to be angry, be angry at the person that allowed this to happen, not the one who is trying to resolve it.

    February 18, 2009 at 5:03 pm |
  16. Tom

    For all those getting foreclosed on the solution is called an Apartment...... this is where you live until you get your finances back in order to purchase another home. Its not my problem that you lost your job, got sick, the cat died, or whatever. Bad things happen – its called life – Its up to you to regroup and move on.

    February 18, 2009 at 4:51 pm |
  17. anon

    To all those "how is this going to help me?" who have also stayed current on their mortgage and are underwater on their loan. It helps by stabalizing the econonmy, the housing market, and your neighborhood which is all necessary if you want to see your house come back in value. So keep playing by the rules because you'll be ahead in the end.

    February 18, 2009 at 4:47 pm |
  18. Bud

    Thanks taxpayers, I'm in for forecloser support :}

    February 18, 2009 at 4:46 pm |
  19. james

    What do I do if my loan is not held or securitized by Fannie Mae or Freddie Mac?????????
    Do I file bankruptcy and wait for the judge to modify my loan??

    February 18, 2009 at 4:43 pm |
  20. Apland

    Andrew wrote – "Why do I have to pay for the failure of others????"

    I guess I can say... Why do I have to pay higher taxes, when a new school is built in my community and I have no children?

    February 18, 2009 at 4:43 pm |
  21. David T

    Hey Obama said he was going to spread the wealth, so now if you have kept-up, or payed off your house like my Family has done. We get to pay for the Bank Bail-out and the bailout of our Neighbor. Since we have a little money not going ot to house Payments we have to share it...
    I believe in helping my neighbor even if they made bad choices, but this is too much... Oh yea and my property value is low due to there non-Payment... Lets sort out the ones that mis represented there Income or LIED, and the ones the Banks should never have given these loans to.

    February 18, 2009 at 4:43 pm |
  22. For Reel?

    These comments reflect how clueless most of us are about the true situation of our economy. Unless you have a stash of cash that will last you for years and not dependent on working for a living – you are all at risk of being in the same situation. Sorry – that's the way it is.
    Nobody's job or current economic position is safe. Hope you are ready for change – because you will be a part of the many who struggle today. Basically, due to your poor attitudes.

    This plan is a great start for people who need to refinance or in threat of losing their home. I'll gladly pay for the rest of my life in tax dollars in order to give some people peace and be able to sleep at night. I've been there – and it's not fun. Good luck to all!

    February 18, 2009 at 4:39 pm |
  23. JAW

    The artificial support of asset values is exactly why Japan is still suffering for mistakes made in the 80's. The government should stay out of this and let home prices adjust in an open market environment. I think I speak for all taxpayers who live within their means that we are sick of paying for the mistakes of those less disciplined!

    February 18, 2009 at 4:36 pm |
  24. Leah

    What if your loan is not with Fannie Mae or Mac? I am with Countrywide.

    February 18, 2009 at 4:36 pm |
  25. Mary Pace

    What about people who is behind on their house taxes, that can cause a forclosurer. They have been paying their house note and wasn't able to pay their taxes also. What kind of relief will you have for them? Will their be anything set up for those people who is in need to pay their taxes to save their homes?

    February 18, 2009 at 4:28 pm |
  26. tony

    what is all this means to new home buyers? please someone answer me. thx

    February 18, 2009 at 4:28 pm |
  27. alan

    "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"

    True. There are many responsible people that through no fault on their own find themselves without a job and is really unfortunate, but that doesn't mean they should be bailed out to keep their homes. We should provide assistance for basic necessarities, but a home is not one of them, last time I checked it is cheaper to rent – which is exactly what I am doing as a working professional.

    February 18, 2009 at 4:26 pm |
  28. s

    I am all for helping those who truly have fallen on hard times. That said, I do not feel that owning a home is something we are entitled to. I do not own a home. Why? Because I did not feel that I could comfortably afford the payments and would rather live in a cardboard box than take one of "those" loans. And I DO have a problem paying for those who did take "those" loans while I do not own a home myself. This is too much of a blanket bailout. I think if you took one of "those" loans, you are now lying in the bed you have made for yourself. I am not asking for assistance for myself, only that the assistance my dollars are paying for be doled out more carefully. And I am truly sorry to those who have lost their jobs and wish you the best of luck in your search. You are the few deserving of a bailout.

    February 18, 2009 at 4:26 pm |
  29. Keith

    I am continually amazed by people with the "what about me" attitude instead of "good for them" or more appropriately "we need to do this". Yes, many people and financial institutions made VERY bad decisions and I HATE that we as a country and taxpayers are having to take on so much debt and future tax burdens in response. But we are where we are – there is no going back and changing the past. The global economy is tanking, millions of jobs are being lost (not just by those who made bad decisions), real estate values are falling (for everyone), and retirement accounts are sustaining significant losses.

    I'm doing well and not in any financial trouble as I minded my financial p's and q's, but many manyy people are in significant trouble. We must continue to take steps to stabalize the financial and housing markets to avoid further extreme impacts to the economy.

    So, please stop asking "where's my bail out" when you don't need one. Recognize the extreme economic difficulties and the potential for further significant issues – which, if they continue, will likely impact you much more than you realize. Be thankful you are okay, work to help resolve the current issues, and make our legislature enact regulations that will ensure this never happens again.

    February 18, 2009 at 4:21 pm |
  30. Tax Payer from Lexington,KY

    1) First Stop Blaming Obama. He trying to fix something. I don't agree with everything he is doing.
    2) Its the long 8 year run of the Bush Administration which has brought us in this situation.
    3) I think the govt should let the economy take its own path. Yes, times are tough for many. We are all in it together.
    4) The economy will plunge down and come back up again. It doesn't make sense to borrow billions & billions and to put ourselves and our future generations in line of debt
    5) FIXING doesn't mean 'TO BORROW MORE MONEY'.
    6)If you screwed up by making a bad choice in buying a mansion. Pay for it.

    February 18, 2009 at 4:20 pm |
  31. JP

    I am in a unique situation. I want the government to help me but I don't know where to turn. I too want to buy a McMansion that is rediculously out of my means. I won't be able to pay for it so I would like the government to reduce my price upon purchase and reduce my mortgage payments to something that is within my net pay.

    Also, I would like my fellow tax payers to pay for a portion of my McMansion. Who do I call?

    Joe Da Plummer

    P.S. Do I have to keep my job or will the government give me a check for that too?

    February 18, 2009 at 4:17 pm |
  32. IRJ

    The TARP, the stimulus plan, the eight years of Bush, and now this plan are indicative of the end of this great experiment. A republic cannot stand if it continues to vote for the candidate who robs the public treasury the most.

    If my own child couldn't pay for their mortgage, I would NOT step in, because the best lessons in life are learned through our mistakes.

    Our children and our neighbors need to learn that defeat is NOT the end, but an opportunity to get off the ground and prove yourself stronger than you ever thought you were. There is not a greater lesson to be learned in liberty than this.

    Although I am a man of hope, I do not have any for the long term lifespan of this great experiment. What will be the result of a bankrupt dollar? The pointing of fingers: and it will lead to the marginalization of a whole sections of the populace and the further erosion of our checks and balances. The ultimate loser, other than those that love liberty, will be the minority cultures in this society.

    February 18, 2009 at 4:16 pm |
  33. Brian

    For those who think helping homeowners is fair, I would like to ask you a question. Would you have the same support for a bailout of the small investors and 401(k) participants, say for $5000 per household?

    February 18, 2009 at 4:16 pm |
  34. The real problem

    I agree that the principals must be lowered in order to really help the homeowner. But, the banks cant lower principal amounts across the board as suggested. If they do this, they will all be bankrupt, and we will have an even larger bailout next. If the banks lower the principals then they are basically "admitting" that the assets on their books are indeed overstated. That would require them to have to mark to market all of their existing "assets" to that level tripping all of their leverage ratios and bankrupting them. The issue here isnt the homeowner. It is the banks and their leverage.

    February 18, 2009 at 4:16 pm |
  35. Jeff

    I live by the rules and still have a job. If I lost my job I will do what I have to do, legally and fiind a way to pay my mortgage. I wonder if who ever wrote this article would respond to some of the comments on both sides. I doubt that, just like Begala will not answer any comments about Mark Sanford and statements written in response. What say you Bagala, if a state does not take any of the "PORKULUS BILL" money will we have to pay it back, do we have to support others that cannot control there spending habits, do we have to pay for dems that ran there cities and states into bankruptcy. Is this you column AC360, if so answer some of the question ask, why should all those that are just getting by even if they are middle class or upper middle class have to pay for those that overspent and were talked into something they could not afford?

    February 18, 2009 at 4:14 pm |
  36. Tiny

    I hope this works I hate to hear about people getting put out of their homes especially those with kids.

    February 18, 2009 at 4:13 pm |
  37. Barb

    I feel bad for the people that are honest and hard working that are trying their best to make ends meet and are making their house payments! Then go to their place of employment one day and find out they lost their jobs! They are the ones that deserve the break! Those who have jobs should quit griping and just be thankful that you have a job today because tomorrow you may not have one. I do get mad at people that want government to bail them out and make a habit of it! They are the ones that should get their act together and not rely on government assistance! Part of the blame is the government's part in letting corporations sending jobs overseas, because the labor and the taxes are too high for corporations to pay because corporations want a big profit at the end of the quarter! Maybe if both would come to a truce and the government would lower taxes on corporations, then the corporations would be able to fill more jobs and our economy would be booming instead of deteriorating! It's all a vicious circle and the circle is run by the government. Until we can get government to break the circle by helping to keep the jobs in America and the government to stop spending money and balance the budget, we are all going to be in trouble! The more bailouts and government handouts we have, the more we pay in tax liability! We have to send responsible and honest people to Congress! The big problem here is we don't know that they are honest and responsible people before they get to hold a seat in Congress and that is part of the problem! They get to Washington and their pockets get to be a bottomless pit!

    February 18, 2009 at 4:13 pm |
  38. Basic concept: Rent versus own

    That is all that matters. No one should buy a home with a mortgage payment significantly more than what current rental rates are. That is the fix to this mess.

    February 18, 2009 at 4:10 pm |
  39. TOG


    Maybe you should have purchased your home based on ONE income. That would have been smart.

    February 18, 2009 at 4:08 pm |
  40. Mary Smith

    Let's say two people bought $250k homes 5 years ago. Homeowner A did nothing but made payments over the past 5 years. Homeowner B refinanced his home multiple times over the past 5 years as the value appreciated and now owes $500k on the home because of all of the "equity-tapping". Homeowner B spent the cash from the money on lavish vacations, expensive vehicles, an RV, and other toys.

    Both homeowners suddently have a reduction in income due to the recession... Homeowner A can still afford his payments because he didn't double the size of my debt and monthly payment. Homeowner B can't because of all of the refinancing to take cash out of the home...

    According to Obama's plan, homeowner B will be rewarded by his lavish lifestyle, piling up debt, etc. Homeowner A will be punished and will be forced to subsidize Homeowner B...

    Ridiculous!! Good behavior is being punished! Poor behavior is being rewarded. Thanks a lot, Obama!

    February 18, 2009 at 4:07 pm |
  41. GS Hart

    "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."

    This eliminates the majority of people that have a problem. So how does this help?

    February 18, 2009 at 4:07 pm |
  42. yvonne

    If a lender knowingly breaks the law, what are the penalties for that? Point, I needed to have a furnace and was unable to refinance because the home was 8/10th paid for at the time. I discovered I had a predatory lender who with all their technology manipulate fraud and incorporate it into their practice because they use that information to report to credit bureaus deliberate fraud information so that I couldn’t get out of their greedy hands. They have jacked up the legal system and pay for the soulless lawyers to lie in court without records; what about a report on that? Now if the fire department and the housing departments tell you that you cannot live in your home until it is livable and no one will loan you the money and you have to live with relatives for six or more months due to saving the money on your own; then what? How does this plan help a family under this type of situation? No defaults; all payments up to date even during unlivable period. I would like to know where some of the names can be dropped so that gov can investigate these people. They are some of the worse criminals of our time. Why should Freddie and Fannie be trusted? Shouldn’t they have known about some of these problems? The plan says that you have to be living in your home for help; sometimes it’s just not possible.

    February 18, 2009 at 4:07 pm |
  43. Mark

    Sheila, Kel, and Kim –

    Where has anyone on this blog dogged out or ragged on anyone who is losing their house because of a job loss or a death in the family or anything like that?

    Most people posting here are upset because the majority of fourclosures are due to bad loans that the buyer should never have agreed to, or because the buyer gambled on the fact that he/she/they could get into a house with an ARM loan and then refi before the rates adjusted.

    Why should the people who made responsible decisions have to "bail" these people who played a large part in starting this mess?

    This has nothing to do with being laid off of work, injured and cannot work for awhile, or being affected by the death of a spouse another family member whose income was relied upon.

    February 18, 2009 at 4:06 pm |
  44. Scott

    I am so tired of all these people who think everyone who is having a housing problem purchased a home beyond their means or have bad spending or credit issues.

    Things in life happen that are beyond our control, whether it is the loss of a job or the drop in home values. Those circumstances can put people in a bad situation that they never intended or could predict.

    Instead of complaining that everyone being helped is undeserving and a screw up consider that this could happen to you one day very soon without warning.

    It did to me and my wife.

    Trust me the help doesn’t exactly show up and bail you out no matter who you contact. In fact it is virtually impossible to get. I know several people in the same boat and nothing. It’s been about a year for us and still no help or even a response no matter how often you try.

    So all the complaining being done about having to bail people out or help them is really not necessary.

    February 18, 2009 at 4:06 pm |
  45. Connie

    I own an investment property in California that is now worth less than the money I owe on it. I cannot sell it and am renting it for about $1000 less a month than my payment due to the drop in rental property value because so many unsold homes are being rented. Is there any help for me?

    February 18, 2009 at 4:05 pm |
  46. Andy

    People keep mentioning "What about people that lost their jobs?"

    This plan does nothing for them. You can't get your loan redone if you can't pay it back. If you don't have a job you can't pay it back.

    February 18, 2009 at 4:05 pm |
  47. Reciprocation

    Many people have focused their argument on compassion-
    that we should help each other in need. It's a great concept.

    Unfortunately most people in our nation today act in a
    decidedly selfish way, without compassion. That includes
    those that are asking for compassion now.

    To those who wish to refocus the issue towards one of
    compassion and helping others: what will you do to
    demonstrate compassion when this storm has cleared?
    How will you demonstrate the same virtues you are now
    demanding from others you don't even know?

    February 18, 2009 at 4:05 pm |
  48. Pete Flores

    I live in southern California and I have a so called "jumbo loan" of 742,000. I put 20% down when I bought it in 2005 and I haven't refied since. My home is now worth about 80k less than I owe on it. I worked for Wachovia for 10 years but I was recently laid off. When I bought my home I could easily afford the payments but now I can't. I used to make $290k a year and now I have been forced to settle for a job paying $84k per year just to try and get by. I have drained all my savings in order to keep my credit spotless but I can't do it much longer. Does Obama's plan help anyone who doesn't have a conforming loan amount or a Fannie or Freddi loan?

    February 18, 2009 at 4:05 pm |
  49. Bryan

    What Is the cost out of my pocket to refinance?

    February 18, 2009 at 4:05 pm |
  50. Jackie R.

    My husband and I worked very hard to get our home and we sure did not go in over our heads at the time, we were both working. Two years later, his hours have been cut in half and we are hurting. I'm trying to keep everything on, food on the table and paying my mortgage payments. We got behind a few months ago due to a problem with our escrow. Didn't know there was a problem until we got a letter from our mortgage company stating that instead of paying 1300 this month, you will need to pay 1800. May not seem like a lot but when you are already robbing Peter to pay Paul, it's hard.

    My question is, our PMI is $541.00 A MONTH!!! A normal PMI is around 50-100.00 a month. Will this plan help me get that reduced? If so, we would be just fine!!!

    February 18, 2009 at 4:03 pm |
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