Will the new mortgage relief help?

Carrie Newhouse shared some great perspective recently on the short sale mess in the Twin Cities housing market. So when the feds unveiled new mortgage relief with sweeteners for short sales and second lien holders, we asked Newhouse, a source in MPR's Public Insight Network, to take a deeper look.

Her read on the newest plan: Might help some, but it's "false hope" for many.

The newest changes to the Home Affordable Modification Program (HAMP) should cut some temporary slack to unemployed homeowners in the hardest situations and encourage some mortgage write-downs.

The private sector and the feds would share the costs.

Maybe the most intriguing idea: boosting payoffs to second mortgage holders to get short sales moving. That's been a growing concern in The Cities.

In short sales, the homeowner owes more on the house than he'll get from the sale. The bank, which likely ends up losing money on the deal, must sign off. That creates a tough situation with lenders wanting to protect their financial interests and Realtors, sellers and potential buyers frustrated by an approval process that can drag on for months.

It's hard enough doing the deals with one mortgage holder -- even more complicated when there are other lenders with a financial claim to the house.

Boosting the payoffs may make short sales more attractive to the mortgage companies, said Newhouse a Twin Cities Realtor who writes the Helping People out of Foreclosure blog and has a lot of experience working with short sales.

Homeowners, she added, may also benefit from doubling the relocation stipend for those who are able to sell their troubled home without going into foreclosure.

But while she sees some potential upside in those efforts, Newhouse's practical nature tells her not to expect much.

"My experience is that these have been guidelines only," she said of the past efforts to help homeowners. "There are no real teeth."

Prior changes to the mortgage relief program were also intended to speed up troubled loan clean up but didn't make a big difference, she added.

"What makes these revisions different? All of the mortgage help programs have been false hope for so many and help for so few. I believe these changes will be no exception."

Take a look at the plan and let me know if you think it will help or if you agree or disagree with Newhouse's take.

Post below or contact me directly.

I gave a heads-up to one struggling homeowner in our Network who might benefit and I'm hoping to share her story if she pursues the new aid.

"The majority of the people I see in trouble are there because of job loss/ change, medical problems or divorce," Newhouse added.

"And by not assisting short sales for every willing seller that doesn't qualify for a modification is just asking for longer-term problems than we have now. And we have long term problems already!"

BONUS INFO: The Minnesota Home Ownership Center today posted a fact sheet and other info on buying a short sale home.

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