Obama's Mortgage Plan and You: Comments Part 1

Hello,
My husband is still working but will be unemployed in another month due to the closing of his company. I am employed and we have been paying our mortgage without issue since we bought our home in 2004. I just checked with the mortgage holder and our mortgage is NOT a Fannie Mae or Freddie Mac. I am sure we owe more than the house is worth now due to the decline in housing values and our lack of significant equity. IF we get into trouble trying to pay the mortgage on just my salary and husband’s unemployement, is there any program that will help us? Our interest rate is 5.875 30 year fixed.

— Camille

Are the banks still charging typical refinancing closing costs under this plan?

By not including borrowers who are severely underwater, doesn’t this almost ensure that these people will simply walk away from their homes, thereby dragging the overall market even further downhill?

— DC


My wife and I purchased a home in Northern California in late 2007, at the time the market appeard to have bottomed out. Nope !! We are now upside down on our loan for a $100K, original loan $330K, value now $230K. The only kicker is my company supplements our mortgage to the tune of 40% for the first 6 years in California. Problemn is that we retire in 2013, and at that time if the housing market has not rebounded to at least cover the loan, we will walk, not comfortable with it, but with a 820 credit rating I am willing to risk it. I will not give up my bank account to pay for a house I do not plan to live in after retirement.

— Randall Johnson

My mortgage is less than 35% of our household income, but my current loan is for far more than the market value of our house. Will I have options for renegotiating my loan under the new plan?

— Cynthia


We bought our house four years ago on a 5 year arm. It is do to reset in May of 2010. Both my wife and I are employed and make our mortgage payments on a regular basis. Based on some recent information I believe we are under water about $60,000 on a $240,000 mortgage. At this point I don’t know if our mortgage is backed by Fannie Mae or Freddie Mac. Can this plan help us if the interest resets to something we can no longer afford? And should I be doing anything before May of 2010?

Thanks.

— Mike M

When a program is introduced that offers amazing below-market rates to troubled homeowners, doesn’t that encourage non-troubled homeowners with higher rates to skip a payment or two in order to qualify?

And a second question…
In your opinion, why didn’t the government decide to extend the life of the loan using a current market interest rate, e.g. 5%? This would also accomplish the core goal of decreasing the homeowner’s monthly payment to manageable levels.

As it is, this program leaves a pretty bad taste. Those of us who were responsible all along are left with our original rates while our less-responsible neighbors are rewarded for their poor decisions.

— Lauren


I am a bankruptcy attorney who provides consultation services to people filing bankruptcy. My question is this: Will filing under Chapter 7 make the debtor ineligible for either of the new federal foreclosure relief programs, assuming they otherwise qualify for assistance?

— Stephen R. Elilas


I do not own a house and I have very little debt. (I’m presently renting.) Is there some way that I can benefit from the Housing Rescue Plan, too? Right now it seems to me as if I’m being taxed to keep my neighbors in their houses. I want to see a side of this that doesn’t make my prudent financial choices look like missing the gravy train on “free” government money. — Josh