A separate bailout for troubled homeowners is supposed to launch this week. The new “Hope for Homeowners” program, passed in late July, is scheduled to go into effect Wednesday. (That’s lightning speed by government standards.) It’s designed to allow refinancing for people who cannot pay their mortgage and who can’t refinance into something better because their home value is now too low to pay off the unaffordable old loan.
Under the program, those borrowers may qualify for a new, 30-year, fixed-rate mortgage insured by the Federal Housing Administration if (and it’s a huge if) their current lender agrees to forgive enough of their debt so that they would have at least 10 percent equity, right now.
ad_icon
These FHA loans are not available to people who could afford to keep paying their current loans but who don’t want to because the home has lost value. Nor are they available to investors, flippers or to anyone who owns a second home.
It’s just like our government to try and reward those who are acting irresponsibly (not paying on their mortgages) at the expense of those who are paying their mortgages on time.
