Foreclosure Bailout Information

The government's foreclosure bailout program, unveiled on Wednesday, February 18th, doesn't start until March Fourth. At that time it's up to the homeowner to contact their lender. And that's when lenders start taking applications for loan modifications.

In the meantime, gather the paper work like you would with any refinancing and do what housing counselors are doing ... learn all you can about the program.

The government program is meant to stop home values in the Tri-State and nationwide from falling. The help is for people behind on their payments and even those who aren't behind but are at risk of that happening.

An offer of an interest rate reduction or even principal reduction could be the catalyst behind making things "better". It could help many two income families that are now one income due to job loss.

In general you qualify if your mortgage payment is greater than 31 percent of your gross monthly income. It's voluntary on the part of lenders but the program also allows for bankruptcy judges to modify mortgage terms and that may be motivation.

This program isn't for homeowners already in foreclosure, "It's likely that if you're already in foreclosure this may have a spillover effect to improve the modifications we can get."

Housing counselors understand the frustration of homeowners who aren't in need of mortgage help and see tax money used on others but point out if your neighbor's home is in foreclosure your home value drops by thousands.

"The government today said $6000, but studies in Hamilton and Clermont say it's $10,000."

This isn't for people who just want a better interest rate. But if you do qualify for the program and haven't been late on your payments, I've been told loan modification should not impact your credit rating.

Finally, if this program might be for you consider having a housing counselor walk you through it. Call 211 for a referral.