Mortgage Help: Who qualifies and how to get it

[jeffrey]

Questions and answers about the Hope for Homeowners Act of 2008, passed by Congress last weekend to try to steer as many as 400,000 struggling homeowners away from foreclosure

Who qualifies for mortgage help and how to get it - Yahoo! News

[ceejay74]

I don't know how much this will help folks who took out their mortgages before home values plummeted. We put about $12K down on a $207K home and paid off another $15K during the first five years, but now that our ARM is about to reset, our home value is not much more (maybe even less) than the amount we still owe: $180K.

I know we didn't make the smartest decision going with an ARM and paying such a small percentage as a down payment, but I've heard much worse: 0% down and interest-only ARMs. How are those folks going to be helped with a 30-year up to 90% of the value of their home, when they probably owe more than 100% on their home?

I don't qualify for the relief listed because I'll be able to afford the ARM adjustments just fine even though I can't refinance to a 30-year fixed as planned. But I do wonder about people that are worse off than me.

Maybe I'm misreading the article...

[simpletron]

Originally Posted by ceejay74

How are those folks going to be helped with a 30-year up to 90% of the value of their home, when they probably owe more than 100% on their home?

the bank writes off the difference between the current loan amount and 90% of the value instead of doing a foreclosure. so you will have to get your bank to agree to this first which may or may not happen.

reminds me of a case study where people were given the choice between
1. 3000 loss or
2. 25% of 0 loss and 75% chance of 4000 loss
the majority of people chose the second one even though the expected loss(3200) is greater than guarantee loss of choice 1. so the bank might not choose what is best for them.

this housing bill is supposed to be a win-win-win for the homeowner, banks, and the government.
banks - takes less of a loss than a foreclosure
homeowner - keep their home at the lost of future profits
government - a share of the future profits at the risk of insuring all these loans.

i think the government is getting the best end of this deal