Well, it looks like more of the same when it comes to keeping people in their underwater homes. This is the big reason why:
The temporary payment reductions only seem to last 3-6 months. Given the long-term unemployment problems we're now facing, I'm not sure how much this will help--and if it does help, it seems likely to assist only the least needy. In fairness, however, it at least keeps people with a brief job loss from racking up arrearages that send them into an otherwise unnecessary foreclosure.
All this does is push the foreclosure back by 3 -6 months and resets the late payment clock. It doesn't help anyone that bought too much house. Also there is a plan to reduce principal so that the FHA can buy the mortgage. That moves the loan from the banks books to the governments books.
After all this I would be willing to bet you that it will only be a few hundred dollars cheaper a month. The same default will still come to pass but just further into next year. It would be better for the government to simply buy the home for the face value of the loan and then take it off the market. That lowers the supply until demand has a chance to work back up. Keeping people in underwater homes who can barely afford the mortgage is a fools errand.
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