[mission9]

The reason that the lenders were bailed out and not the mortgagees, was SO THE LENDERS COULD FORECLOSE, AND TAKE THE PROPERTY. The government will pick up the difference between the dollar equity loss and the actual value at the auction sale. There are reports of some banks holding on to properties, rather than auction, hoping for the price to recover.

Here is a list of the qualifications for government help:

As the program is based on a family’s long-term ability to repay the mortgage, owner-occupants must:

Have a mortgage that originated on or before January 1, 2008;

Not be able to afford the current loan;
Have made a minimum of six full payments on the existing first mortgage, with no mortgage payments missed intentionally;

Not own a second home;
Have a mortgage debt-to-income of at least 31 percent;
Have not knowingly or willfully provide false information to obtain the existing mortgage and have not been convicted of fraud in the last 10 years;
Follow FHA’s long-standing and strict policy of fully documented income and employment; and
Agree to share both the equity created at the beginning of their new HOPE for Homeowners mortgage and any future appreciation in the value of their home.
Additionally, existing subordinate lenders must agree to release the homeowners’ outstanding mortgage liens.

Very few people can meet these criteria, and even if they did, the government will capture half of their home equity.

Translation, foreclosures will continue, and probably accelerate.

[CottonBall]

Agree to share both the equity created at the beginning of their new HOPE for Homeowners mortgage and any future appreciation in the value of their home.

Does this mean with the lender?