Loan Modification

HUD announced a new program today to assist struggling homeowners. They are going to lend up to $50,000 to families in trouble. These are bridge loans so that the owners can continue to service the existing debt and pay property taxes. The individual loans will be made at a zero interest rate. $1 billion of these loans will be made.

My question is, does the FHA have a fiduciary responsibility to the borrowers, and if so is this billion-dollar loan program just a way to print more money and kick the can down the road?

... they get no return on the money, but they also make it non-recourse and they subordinate it to any existing first or second liens on an obviously underwater property? If it is non-recourse you can just walk away. They won?t even call you. They can take the house but the first liens come first so the FHA gets the big goose egg. This is not a loan. It is a gift.