I recommend all homeowners visit the website:
www.MakingHomeAffordable.gov
You are asked to answer 4 or 5 questions to determine your eligibility for either refinancing or mortgage modification.
I recommend you visit the site, even if you aren't in need of the services the government is providing.
What stood out to me was Question #5 for Mortgage Modification eligibility. "Is your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner's association dues, if applicable) more than 31% of your current gross income?"
THIRTY ONE percent!
If I was paying 31% of my gross income on my mortgage, that would be more than $12,000 a year I currently pay. It would be a monthly payment I had no chance of paying WITH a job (assuming I wanted to anything besides sit in my home).
I know millions were suckered into bad mortgage deals over the past few years, but it wasn't until I ran the numbers for my own personal situation that I realized the true significance of this sucktastic situation.
I'm not sure exactly what the government's goal is with these loan modifications, but if they are simply trying to get people's payments down to a 'mere' 30% of your income, that means very little, if any, extra money for spending money on all the crap that keeps our economy chugging along (but that is also FUN).
I'm unsure what percentage of people are/will be paying 30% of their gross income on mortgage payments, but after food, gas and health care costs, I can't imagine they'll have any leftover 'fun' money. For a long time.
That's going to impact retail sales, tourism, durable goods, etc. for a long time.
It seems as if there will be chunk of people who 'have the American Dream' (aka, a house), but nothing else. That doesn't sound so dreamy.