Right on!!! Glad to hear someone else seeing these situations for what they are! The situation does not surprise me at all, just as lame as those freakin’ economic stimulus checks!

I am SO glad we live in a shitty, run-down house, in a bad neighborhood, that we paid cash for!

sm: economic stimulus my buttocks. The Great Unwashed think it’s xmas coming early.

E2001: Me too. Now you can afford to help ME out :)

Thanks for the comments.
-the southpaw stratocaster fella

Seems incredible to me that this could happen but it has. I never thought I would see this day but here it is and there is absolutely nothing that can be done about it. All sense is out the window.

In my case it would actually have been better for me to be unemployed for the last year or so (or minimally employed so that I can qualify) than to have the job I had overseas (in the name of personal responsibility)

The only thing one can do now is play the game by the new rules. I never thought I would say this … but … if that includes walking away from a house that is severly underwater (50% on a house that I can afford but in a bad neighborhood) then that may be the way it has to be played.

Yuck. Would it were not so.

Ok dont get ahead of yourselfs by starting to walk away from your home if you can afford it. The bill does specify how your monthly salary is affected by your mortgage payment.

If you are already a home owner here is what you need to know

Who’s eligible?

Qualified borrowers must live in their homes and have loans that were issued between January 2005 and June 2007. Additionally, they must be spending at least 31% of their gross monthly income on mortgage debt to be eligible for the program. They can be up to date on their existing mortgage or in default, but either way borrowers must prove that they will not be able to keep paying their existing mortgage - and attest that they are not deliberately defaulting just to obtain lower payments. Before homeowners can get FHA-backed mortgages, they must first retire any other debt on the home, such as a home equity loan or line of credit. Borrowers are not permitted to take out another home equity loan for at least five years, unless it’s to pay for necessary upkeep on the home. To get a new home equity loan, borrowers will need approval from the FHA, and total debt cannot exceed 95% of the home’s appraised value at the time.

How does the refinancing process work?

This is a voluntary program, so lenders holding the original mortgage have to agree to rework a given loan before things can get started. The bill requires lenders to make major concessions, writing down the value of the loan to 90% of the home’s current value. In areas where prices have plummeted by as much as 20%, that will mean a substantial loss for the lender. Lenders will not sign off on a workout unless they think that they’ll lose less money on that than they would by allowing a home to go through the costly foreclosure process. Each loan will have to be underwritten on a case-by-case basis. That means the a new appraisal will need to be completed to determine the home’s current value, as well as examine and verify income statements, bank accounts, job histories and credit scores. Based on that new appraised home value, the lender must determine how much the original lender has to reduce the original mortgage, so that it will reflect 90% of the home’s market value. If the original lender agrees to the writedown, the new lender buys the old loan and takes over the reworked mortgage. As part of the deal, the old lender writes off any fees and penalties on the original mortgage, including prepayment penalties, and accepts the proceeds from the new loan on a paid-in-full basis. Additionally, it pays the FHA an up-front premium equal to 3% of the mortgage principal. Borrowers agree to share any profits from future home-price appreciation with the FHA. To do that, they’ll pay a “3% exit fee” of the mortgage principal to the FHA when they resell or refinance. Plus, they’ll agree to pay the FHA 100% of any profits they realize from higher home prices if they sell or refinance within a year. So if the original loan principal is $200,000 and the home sells for $250,000, the borrower will owe the FHA $50,000, minus costs. After a year, borrowers will share 90% of the profits with the FHA. The percentage keeps dropping in 10% increments to 50% after the fifth year, where it stays.

Viri: Thanks for the information. I’m sure it will be helpful to people.

How: wishing you the best of luck.

how about if you dont live in that house and you are rent it out and still losing $800 ? oh, the house is only worth $180,000 compared to the original purchase price of $245,000. I never been late on payment.

I used to think the same as most, your research, decision and responsibility. That is until now, when I was not only unethically lied to by the professionals, but also bought into a market that dropped 40% in 6 months and now I am being forced to move due to military orders. I completely qualify for this program, except that Chase bank does not even consider this program, they would rather see me lose the house out right.