The HOME Act: Taking from Your Nest Egg to Save the Nest?

The HOME Act: Taking from Your Nest Egg to Save the Nest?

Under a bill proposed last week in Congress, those far behind on their mortgage can withdraw from their 401(k) to save their home - without any penalties.

According to the language in the HOME Act, the proposed bill allows a taxpayer to withdraw money from a qualified retirement plan penalty-free - but not tax-free - to make mortgage payments toward his primary residence with a lifetime cap of $50,000 or one-half of the present value of one’s 401(k) account (whichever is smaller), so long as those funds are used for that purpose within 120 days of withdrawal. This sounds like a great idea that could potentially help millions of homeowners that are behind on their payments or struggling with a recent job loss get back on their feet, right?

But who does this really help?

To me, this sounds like another example of trading tomorrow for today that will do little to ultimately help the millions who are hopelessly underwater, and who will eventually lose their home anyway. Is this bill really about helping the millions of American's facing impending foreclosure? Or is the harsh reality that this is another bank bailout that we'll end up paying for when these folks need help because they haven't saved enough for retirement.

What do you think? Is this more of the same? Or finally a piece of legislation that can change the fortunes of those who choose to rob their future for the present?

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