Reply #32: This will help a lot of people out who are still stuck in crappy bubble mortgages.

[Xithras]

I have a friend, right now, who bought using a 30 year I/O loan and has been keeping up with the payments just fine. He's been considering walking away from it anyway. He's fine with it being upside down (he's in his 30's and wants to retire in the home, so he's OK with sitting on it for a few decades), but he originally only planned on keeping the I/O loan for a few years and wanted to refi. With his current loan, he will be paying a mortgage for 30 years, only to finish owing just as much as he started with. Even though he has plenty of credit and a good job, the banks won't touch him because his house is so far underwater (he owes around $250k on a home that's worth a bit over half of that nowadays).

I've already forwarded articles on the new plan to him this morning. Hopefully this will help owners like him who are still trapped in crappy bubble-era loans and can't get out of them because their houses are under water.

I tend to criticize Obama a LOT when I think it's justified, but I'm not criticizing this plan at all. It's a good program that has the potential to help out millions of stuck borrowers. My only grumble is that he didn't do this two years ago, but I'd rather see it now than not at all (which is what the Republicans would have offered).