More than 3 million owners have lost their homes during the past three years, and almost 5 million more could follow this year through 2011, according to Moody’s Economy.com.
The Obama administration promises to help homeowners who are struggling financially to keep their home with the new $75 billion housing rescue plan.
“The American dream is being tested by a home mortgage crisis that not only threatens the stability of our economy, but also the stability of families and neighbourhoods,” Obama said.
“All of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen.”
The key elements of the Homeowner Affordability and Stability Plan
1) Refinance 4-5 million homeowners into cheaper mortgages
2) Govenrment aid to keep 3-4 million homeowners out of foreclosure
3) Doubling the commitment to Fannie Mae and Freddie Mac to $400 billion
The highlight of the Homeowner Affordability and Stability Plan is a $75 billion program to encourage lenders to cut monthly mortgage payments for borrowers at risk of default, specifically to no more than 31 percent of their income. The administration said it could help as many as 4 million struggling owners stay in their homes.
The plan also doubles the backing to government mortgage companies Fannie Mae and Freddie Mac to $200 billion each.
Foreclosure proposal lets judges modify mortgages
A key provision in President Obama’s $75 billion foreclosure prevention plan would allow bankruptcy judges to modify home mortgages — a measure supported by bankruptcy attorneys and consumer groups but opposed by lenders.
The American Bankers Association has argued that allowing bankruptcy judges to change the terms of mortgages will increase the risks of mortgage lending at a time the market is already struggling.
Still not sure what it’s all about? Read the Foreclosure plan questions & answers on Freep.com and the blog post on The White House blog.
Image by respres under Creative Commons.
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I am in foreclosure waiting on a loan mod. I have been looking just in case we are not approved, The requirements that the administration are putting out there as far as 31% of your income???? That is unatainable. How can 31% plustaxes and insurance upkeep on the home. I have done the math. Plus everyone pays taes not the rich or the poor but the middle class it only goes so far. When govt gets needs money they hike up your taxes when the banks need money they find a way to charge more fees or get bailouts but if your middle class and need help because we are the only ones that keep US going we need a bailout., a loan mod is not a bailout it is just to get your loan in line affordable. The banks were ‘t crying the blues when they were getting that gravy money. We have got to save the middle class they are the ones who support the United States and pay taxes that is why the govt has to help. No middle class then govt will be in the unemployement line.
last april i started with chase bank working on a help for homeowners modification my apr was 8% payment per month was1741.00 escrow included all insurances and taxes at that amount at that time i was only 1 payment down but struggling to make it and thought i would seek help before it got worse 4 months ago they got ahold of me and dropped the payment to 1041 during the time it was in the underwriters i have just recieved the final papers and low andbehold i now have a monthly payment of 1604.00 per month i have also racked up over 7000.00 in late fees no money was going into my escrow account during the time it was in the underwriters so now the taxes and insurance are also in arrears during the last 20 years of owning this house i was never late on the payment i have tried several times to contact chase to speak to somone reguarding this at no time during the year its taken to get this (modification) have i been able to talk to one loan officer about my loan chase will not give you a contact person they just shuffle you to whoever picks up the phone nobody there to talk to who would be familiar with my loan when the papers got to me i only had a very short time to sign and get them back to chase my new loan is exactly the same loan i was under only they dropped the apr to6.25% not even two points as i was @ 8% my morgage was not backwards and i have quite abit of equity in the house but cannot touch it because now i am showing over 7000.00 in arrears if taking 140.00 off my payment per mo. but putting me over 7000.00 dollars in dept while they drug there feet is helping HOMEOWNERS BEWARE!!!!! i am now forced to sign or they will come after me for the full amount of course they want my house as there is close to 100,000.00 of equity in it and now i am locked into a 1600.00 + payment for one year until they will allow me to look elsewhere for help if i can make it without a late payment so i am right back where i started at with no help in sight thanks president obama for all the help!!! we are still lining the fat cats pockets the ones that are responsible for the mess this country is in STILL!