Mortgage Bill Does Little To Help Homeowners

You have likely heard that Congress has enacted some sort of statute that will help homeowners save their homes if they are behind on their mortgages. This belief is fueled by media hype and does not reflect reality.

Please read the attached summary of the Bill's provisions, and you will see why we doubt the Bill will provide any meaningful relief.

Among the problems/observations:

  • It is purely VOLUNTARY ON THE PART OF LENDERS. In other words, they do not have to do a thing.
  • You have to SHARE ANY EQUITY in your home with the government as a condition of doing the program.
  • Your debt to income ratio must be greater than 31% as of 3/1/08. In other words, you must owe a significant amount of money in order to qualify-potentially rewarding those who have irresponsibly used credit and borrowed more than they should have borrowed. People who have been more responsible will be penalized.
  • YOU CAN'T HAVE A SECOND MORTGAGE OR EQUITY LINE. If you do, you have to pay it off before the program will apply.
  • Despite the fact that mortgage experts believe that well over 1 million people need the relief, only about 400,000 people will qualify.