It's real but I think it's for those whose houses have lost value but the loan is still the same, so in essence they're paying for more than their house is worth and they have other money issues. The Government is trying to help with getting what's owed and what it's worth closer to matching so they're paying for what they've got or they'll evaluate and point out if people have houses they really couldn't have afforded no matter what.

Housing values can't go up again until all the foreclosures and "cheap" houses are off the market and cause/effect works again; if there is another house like yours in the neighborhood that is cheaper then your house has to be cheaper, etc. But it sounds like your neighborhood is fine.

If you have some equity, you might look at your interest rate and see if refinancing is a good idea; the interest rates are still pretty much close to their lowest. Refinancing can lower your monthly payments too and that's just a regular/normal bank thing, especially if your house still has good value. We just refinanced (had to because we had a variable rate and our term was going to be up within the year) and our house had lost a little value so that made finding the right/least expensive refinance/interest rate a little more complicated.

So, it's all basically:

Person A has fancy house, low income - they'll lose the house

Person B has normal house, normal or lost income, normal house has lost value and they want to stay/move but (1) their mortgage is higher than they can now pay because of lost income and they can't get a refinance because the house has lost too much value or (2) they want/have to move (perhaps because they can't afford the mortgage anymore) but no one will buy the house (so they can't afford to buy the next house)

Person B is who the program is for.