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1. Remove restrictions on Fannie Mae and Freddie Mac that prohibit the institutions, both taken over by the government last year, from refinancing mortgages they own or have guaranteed when more is owed on a home than it is worth. The White House says this could reduce monthly payments for up to 5 million homeowners.
2. Create incentives for lenders to modify subprime loans at risk of default or foreclosure. For lenders that agree to reduce rates to levels borrowers can afford, the government will make up part of the difference between the old monthly payment and the new payment. Participating lenders also will be required to cut payments to no more than 31 percent of a borrower’s income. Up to 4 million homeowners could benefit.
3. Keep mortgage rates low for millions of middle-class families seeking new mortgages. Using money already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to buy Fannie and Freddie mortgage-backed securities to maintain stability and liquidity in the marketplace. The department, through its existing authority, will provide up to $200 billion in capital for this purpose.
4. Pursue reforms to help families avoid foreclosure. The administration will continue to support changing bankruptcy rules so judges can reduce mortgages on primary homes to their fair market value, as long as the borrower sticks to a court-ordered repayment plan. As part of the $787 billion stimulus package that Obama signed into law on Tuesday, the administration will award $2 billion in competitive grants to communities experimenting with innovative ways to prevent foreclosures.
That depoends on now resonible you are. If you signed a false income statement to get aloan its coing. If you didn't it isn't. What you will get is the bill i the guise of higher future taxes to pay fot the stimulus'and the moratgage rescue. Hopely the banl loan and the auto loans will be paid back as they are loans.
Although I am not generally a fan of bail-outs or the new administration, I think this plan is a reasonable strategy to reduce housing pressure and help citizens. Congratulations Mr. President, this is your first winner in my book.
Although I am not generally a fan of bail-outs or the new administration, I think this plan is a reasonable strategy to reduce housing pressure and help citizens. Congratulations Mr. President, this is your first winner in my book.
So we now reward those that made poor choices? And I'm sure there had to be a lot of lies on the borrower and lender side of the loans. The new American way.
So we now reward those that made poor choices? And I'm sure there had to be a lot of lies on the borrower and lender side of the loans. The new American way.
This is a simple choice... you use tax money either way... You make the choice for your money; A) an empty house that you dump at a large loss that impacts the local market or B) take the same money and keep someone in the house with no additional negative impact on the market.
If you choose (A) you may also have to pay social services and housing funds for the people without a home.
It is too late to roll back all the bad decisions by government, businesses, and individuals... now it is a matter of moving forward with the best answer for the country. I hate the situation we are in but it is time for answers not lectures.
The Republicans sent a letter to the White House asking for answers regarding this plan.... I think they are pretty good questions, I would like an answer as well...
• What will your plan do for the over 90 percent of homeowners who are playing and paying by the rules?
• Does your plan compensate banks for bad mortgages they should have never made in the first place?
• Will individuals who misrepresented their income or assets on their original mortgage application be eligible to get the taxpayer funded assistance under your plan?
• Will you require mortgage servicers to verify income and other eligibility standards before modifying mortgages?
• What will you do to prevent the same mortgages that receive assistance and are modified from going into default three, six or eight months later?
• How do you intend to move forward in the drafting of the legislation and who will author it?
Obama's response to critics: The plan will not support irresponsible homeowners.
"It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell," Obama said Wednesday. "It will not reward folks who bought homes they knew from the beginning they would never be able to afford."
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That's my THOUGHT exactly :-0
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