Don’t panic piggs.. like many of the wise ones here have stated, this plan is merely a political stunt. It is to appear that the gov. is TRYING to do something about the correcting of the housing bubble.

Very few will benefit from this plan in reality. There is no way it can stop even 1/4 of the foreclosures, and it will affect socal even less. Here in socal, we have had bigger losses on values than most of the country. This means that FBs have zero or negative equity. They would rather pay a ridiculous mortgage with the hopes of making big equity, than pay a reduced mortgage and owe more than the home is worth. FBs will likely throw in the keys anyways, even if they do qualify (very unlikely since most loans were bases off of stated incomes), and the lender agrees to help them out.

This might prevent a few foreclosures in socal, but really, there will still be many more homes to hit the MLS in the next 12 months. Inventories are currently at record highs and climbing. Buyers will not benefit at all from this plan. If anything, the money used to help the few FBs will not be available to new 1st time buyers. Lending standards have returned, and the economy is slowing. Unemployment is rising slowly and will likely pick up pace in the next few years. Even thought home prices are falling, many other costs are rising. We are still in a huge bear market for RE. Don’t worry, prices will come down, but that still doesn’t make it right. We need to keep voicing our opinions, and telling our case for why government should stay out of the free markets.

I would still rather be a renter (with cash invested)than an FB with negative equity, (still)overpaying for a reduced mortgage payment.