Want a Quick Rundown of the Obama Housing Fix Plan?
The president's 75 billion dollar Housing Fix-it Plan has arrived and because people are asking what its all about, here is my expert analysis. In a nutshell, the plan offers to make house payments more affordable for hard-pressed homeowners and contains five major benefits. Here they are:
1. The Fix-it Program helps Hard-Working Homeowners Stay in their homes: Those who commit to make reasonable monthly mortgage payments can stay in their homes " providing families with security and neighborhoods with stability. Thus owners who may have lost equity due to the faltering economy can lower their payments without having to move.
2. The Initiative Offers No Aid for Speculators: This initiative will go solely to helping homeowners who commit to make payments to stay in their home " it will not aid speculators or house flippers.
3. The Plan Helps Stabilize Neighborhoods. A foreclosure often brings an unwelcome element into a neighborhood. Most vacant homes attract vandals and vagrants as well as piles of yellowed newspapers on the stoop. Keeping a property from becoming a foreclosure in the first place, the plan helps to stabilize a neighborhood.
4. It Provides Support for Responsible Homeowners: Because loan modifications are more likely to succeed if they are made before a borrower misses a payment, the plan is proactive. It will include households at risk of default despite being current on their mortgage payments.
5. It helps Bring Monthly Payments to Sustainable Levels: The goal of the Homeowner Stability Initiative is to reduce debt for a family to a sustainable (31% of debt to income) level. The Treasury Department will standardize the loan modification guidelines and implement them through Fannie Mae and Freddie Mac. The goal is to create monthly debt payments that will be able to be kept for a long time.
Although the Treasury Department hopes to keep as many homeowners in their homes as possible, at the same time it is promoting security. Step one of the plan attempts to avert the current financial bleeding by stopping lenders from foreclosing, and keeping families in their homes. Many lenders are looking to sell or auction assets at bargain prices, which not only drives home prices down further, but makes it harder for purchasers to obtain new loans. For example, if you were a lender making a loan for $200,000 today, wouldn't you be a bit concerned about the foreclosure that just closed escrow in the neighborhood for $150,000?
The Obama Housing Fix-it Plan has much more to it. Parts of it involve granting incentives to lenders who postpone foreclosures, paying down principal for owners who stay in their property for five years, and even giving incentives to people who successfully modify loans.
By helping to modify the loans of millions of hard-pressed homeowners and thus lower their monthly payments, the administration may also be jolting the economy at the same time. The word on the street is to look for June 2009 to be the time for that to start to happen. Who knows? Purchasing a real estate bargain now and holding it as a rental property may prove to be a smarter move than parking the money in an IRA or in the wild and crazy stock market!
1. The Fix-it Program helps Hard-Working Homeowners Stay in their homes: Those who commit to make reasonable monthly mortgage payments can stay in their homes " providing families with security and neighborhoods with stability. Thus owners who may have lost equity due to the faltering economy can lower their payments without having to move.
2. The Initiative Offers No Aid for Speculators: This initiative will go solely to helping homeowners who commit to make payments to stay in their home " it will not aid speculators or house flippers.
3. The Plan Helps Stabilize Neighborhoods. A foreclosure often brings an unwelcome element into a neighborhood. Most vacant homes attract vandals and vagrants as well as piles of yellowed newspapers on the stoop. Keeping a property from becoming a foreclosure in the first place, the plan helps to stabilize a neighborhood.
4. It Provides Support for Responsible Homeowners: Because loan modifications are more likely to succeed if they are made before a borrower misses a payment, the plan is proactive. It will include households at risk of default despite being current on their mortgage payments.
5. It helps Bring Monthly Payments to Sustainable Levels: The goal of the Homeowner Stability Initiative is to reduce debt for a family to a sustainable (31% of debt to income) level. The Treasury Department will standardize the loan modification guidelines and implement them through Fannie Mae and Freddie Mac. The goal is to create monthly debt payments that will be able to be kept for a long time.
Although the Treasury Department hopes to keep as many homeowners in their homes as possible, at the same time it is promoting security. Step one of the plan attempts to avert the current financial bleeding by stopping lenders from foreclosing, and keeping families in their homes. Many lenders are looking to sell or auction assets at bargain prices, which not only drives home prices down further, but makes it harder for purchasers to obtain new loans. For example, if you were a lender making a loan for $200,000 today, wouldn't you be a bit concerned about the foreclosure that just closed escrow in the neighborhood for $150,000?
The Obama Housing Fix-it Plan has much more to it. Parts of it involve granting incentives to lenders who postpone foreclosures, paying down principal for owners who stay in their property for five years, and even giving incentives to people who successfully modify loans.
By helping to modify the loans of millions of hard-pressed homeowners and thus lower their monthly payments, the administration may also be jolting the economy at the same time. The word on the street is to look for June 2009 to be the time for that to start to happen. Who knows? Purchasing a real estate bargain now and holding it as a rental property may prove to be a smarter move than parking the money in an IRA or in the wild and crazy stock market!
posted by Debt Consolidation Loan at
10:51 AM
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