Yesterday the Treasury Department released the specifics about how mortgage servicers are to be coaxed into rewriting loan terms to keep struggling borrowers in their homes. This, as you may recall, is one part of the government new three-pronged housing crisis fix. (The other two are letting some underwater borrowers refinance and using Fannie Mae and Freddie Mac to keep interest rates low and the mortgage markets liquid.) You can read the new details here (it’s a PDF). You can also go here to read the story I wrote last month when the whole plan was first rolled out.
I have to say, I was a little shocked by the level of coverage the new guidelines got in the papers this morning (though perhaps not as shocked as you are that I still read actual ink-soaked newspapers). We already knew a lot of this. I would guess that the average person out there is most interested in figuring out how, if at all, they are going to benefit. If you go here (it’s a PDF), you’ll find a Q&A geared toward housing counselors. But I think it’s a really good walk-through for homeowners, too.
Of course, the broader idea is that if we clean up the mortgage mess, we all benefit by having one less economic albatross around our collective necks. Again, I’d direct you to the story I already wrote for a glimpse of how likely I think this is going to be a magic snap-your-fingers cure-all (spoiler: not very).