The mortgage bailout and foreclosure rescue from the federal government has elicited a lot of emotion. Many homeowners have complained that they have been struggling to pay their mortgage on time and that they shouldn't have to bail out those that have stopped paying.
Help *may* be on the way. As new details of the Housing Affordability and Stabiliy Plan emerge, it seems that homeowners who are current on their mortgage will be eligible for the plan. If their mortgage is with FNMA or FHMC, and they are less than 5% "under water", they can qualify. They do, however, have to show an imminent hardship that will make it hard for them to continue paying on time.
The big questions: What will constitute a "hardship", and what percentage of this money will actually be available to homeowners who are current? Would it make more sense to reward those who are still current, as they are the least likely to walk away from their homes in one year from now? Would it create too much of a subjective process and a mountain of paperwork to determine who is truly challenged financially? Surely it's easier to say "This person isn't paying on time, they qualify." That doesn't mean it makes the most sense.
No question, there will be a landslide of people applying. Details of the plan are ever-changing, so you can keep your fingers crossed, but don't get too excited yet.
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