Another Plan from the Government

October 24, 2011


On my way to work this mornings, I heard a news commentator announce that the government is launching a new program to help underwater home owners. What I heard was that this plan will eliminate appraisals and will reduce the interest rate paid on the mortgage to current rates. I did not hear whether the proposal includes reducing the amount of the loan so as to eliminate the underwater part of so many homeowners.


One criteria for participating in this new program is that the homeowners monthly payments on the existing loan must be current - no delinquencies. This could be a major hurdle for some homeowners as all previous conversation with their lenders made missing payments a criteria for eligibility in a loan modification or short sale program.


I am sure more details will be forthcoming. Since this is at least the third, probably the fourth, attempt of the government to keep present homeowners in their homes, we can hope that the government has learned what won't work.