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There are now 2 foreclosure plans - Home Affordable Refinance and Home Affordable Modification

The program could provide some borrowers mortgages with interest rates as low as 2 percent and there are also incentives that may pay down principal in some cases

Eligible if:
Are the owner occupant of a one to four unit home.

The loan on your home is owned or controlled by Fannie Mae or Freddie Mac

You are current on your mortgage payments (current means that you haven't been more than 30-days late on your mortgage payment in the last 12

You believe that the amount you owe on your first mortgage is about the same or slightly less than the current value of your house, and

You have a stable income sufficient to support the new mortgage payments.

http://www.mercurynews.com/ci_11833671?source=most...

The Boston Globe has some other details:
Incentives are provided to extinguish second liens on loans modified under the program. (According to another story: While eligible loan modifications will not require any participation by second lien holders, the program will include additional incentives to extinguish second liens on loans modified under the program, in order to reduce the overall indebtedness of the borrower and improve loan performance. Is this POOF the second lien you took out for buy heaven knows what is suddenly gone?)

Homeowners are eligible for up to $1,000 of principal reduction payments each year for up to five years.
An unpaid principal balance that is equal to or less than $729,750

The United States Treasury will partner with lenders to reduce monthly payments. In order to receive compensation from the government, lenders must lower payments to a specified affordability level (no more than 38 % of total income). The government will then match reductions dollar for dollar down to a 31% debt-to-income ratio.

Since many won't qualify because their homes are worth less than the principle balance, Congress is passing bankruptcy "reform" which will have a cram down provision

How difficult will it be for people to get mortgages after all of this happens?
What lender is going to want to give a loan knowing that a bankruptcy judge can step in and invalidate the mortgage contract by forcing the principle owed to be lowered?

The more I read about this program the more I realize that the irresponsible are being rewarded and the responsible will pay and pay and pay

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