$75 Billion Foreclosure Prevention Plan Unveiled
Battling to reverse the nation’s foreclosure fiasco, President Barack Obama today announced a $75 billion foreclosure prevention plan aimed at helping an estimated 9 million homeowners avoid foreclosure.
“The plan I’m announcing focuses on rescuing families who have played by the rules and acted responsibly by refinancing loans for millions of families in traditional mortgages who are underwater or close to it,” said Obama at a speech in Meza, Ariz. To read the full text of the speech click here.
The plan — known as the Homeowner Affordability and Stability plan — offers incentives for lenders that modify troubled loans, with up to $1,000 for each modification and then another monthly “pay for success” fee as long as the homeowner stays current.
A key element of the plan allows some 5 millions homeowners who are still current on their loans, but have less than 20 percent equity in their homes, to refinance, so long as their loans are owned or guaranteed by Fannie Mae and Freddie Mac.
“This plan will not save every home, but is will give millions of families resigned to financial ruin a chance to rebuild,” added Obama. “It will prevent the worst crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone.”
Do you think the federal government is going to save families from “financial ruin” and bring down the foreclosure rate? Or is Uncle Sam only prolonging the housing crisis and making matters worse?
To read more about the plan, the White House website has a question and answer section.