The changes “will better assist responsible homeowners who have been affected by the economic crisis through no fault of their own,” an administration official said.
However, the catch is this:
“The program is designed to lower borrowers’ monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms up to 40 years. To complete the program, homeowners need to go through a three month trial period and provide proof of their income, plus a letter documenting their financial hardship.”
I’m thinking all these programs have failed b/c people just plain and simple can’t afford the houses they bought during the bubble. They can’t modify the loan b/c the people can’t prove they can make the payments.
For those who can prove they can make the payments, what kind of incentive is a low rate for only 5 years and extending the loan to 40 years. Seems like more temporary band-aids.
