The report on the Senate version of the stimulus bill is that it includes incentives and credits for new home buyers, but nothing that directly helps prevent foreclosures of existing homeowners.
Until we stop the slide of home prices, greased by foreclosures, new buyers will be hesitant to jump into the housing market. Buy now without price stability in the market, and you too can own a house worth less than you owe.
Until we have the right to modify mortgages down to the present value of the property, I have a hard time advising clients with homes underwater to continue to pay on mortgages well over the value of the house.
Even with mortgage modification, the borrower is still looking at a home loan that equals the value of the house. Depending on the monthly payment, this may not be wise for everyone.
But, unfortunately, I don’t have to do that analysis yet, because Congress is sitting on the Helping Families Save Their Homes in Bankruptcy Act.
