Ok,

My clients have their house on the market and have some friends that live in their neighborhood.  Both the wives just got laid off from the same company about 3 months ago.   My clients can still make their house payments and bills, but don't have as much fun money.  This other couple can't really make it much longer.

This other couple went to a class a few weeks ago on mortgages for people who are struggling.  At the end of the class they had a woman approach them and tell him that the guy that was running the class is running a scam and they should listen to what she has to say.   So they are working with this lady that approached them.  My clients have been getting told about this program from their friends and have been very curious.  After getting all the facts over the last week, I realized they were approached to do the Hope for Homeowners.  My client called me upset today because her friends/neighbors told them that the goal for them is to de-value the homes in their neighborhood so they can get approval for this program.  So if they bought their house for $220,000, then took a 2nd out to make it $250,000.  But can no longer afford that.  Then this program finances up to 90% of the value.  Which means the lender has to write-off the difference of what the loan is and what they feel it is now worth.  Now the homeowners goal is to have it appraised for really low so that their mortgage value to what they could sell it for is good for them.  I understand that some people have made good choices financially and they got laid off just need this program to help them.  Where I am frustrated is that my clients have been very wise with their money.  They have no debt besides their house and car payment.  Now their house might get de-valued because of many other's poor choices.  

On top of that it is another realtor who is suggesting this program to them.  What good is it to devalue homes that you yourself is trying to sell?  I just don't get it.  If you are not following me.  Go to this link and they can probably explain it a little more clearer.

 http://www.hud.gov/fha/home080730.cfm

Then here is some of the flaws with it.

http://yourmortgageoryourlife.wordpress.com/2008/10/27/no-hope-for-homeowners-foreclosure-prevention-program-falters/

Brooke