The first thing to understand here is #HAMP, the #HomeAffordableModificationProgram, which received the $100b Congress allocated to help homeowners whose mortgages were "underwater" - that is, whose houses were worth less than they owed for them.

That money could have gone to "principal reduction" - that is, to paying off part of your loan. If you owned $350,000 on a house that was now worth $300,000, the Feds could give the bank $50k and you wouldn't be underwater anymore.

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