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Is housing rescue plan enough?

February 18, 2009

President Barack Obama’s much-anticipated plan to deal with the U.S. housing crisis aims to help as many as 9 million families avoid foreclosure on their homes, one of the root causes of the global financial meltdown.

The Obama plan will involve government subsidies to mortgage servicers and lenders to encourage them to lower payments for borrowers in distress.

The aim is to bring mortgage payments to a more affordable range of around 31 percent of borrowers’ incomes.

At the end of last year, just over 9 percent of all home loans in the United States were in arrears or already in foreclosure, the Mortgage Bankers Association has said.

A total of 8.1 million U.S. homes, or 16 percent of all households with mortgages, could fall into foreclosure by 2012, according to a report by Credit Suisse.

Is Obama’s rescue plan enough to curb the tide of soaring foreclosures? Share your thoughts.

Comments

This is notgoing to resolve the issue, there are lots of people who haave been working hard to stay above the water needs to be rescued. The best solution to this problem is have a fixed rate of 4% or less on the primary home upto 400,000 this will help the families accross the board.

Posted by Don Shownkeen | Report as abusive
 

What a staggering waste of money. The last mortgage assistance spending didnt work and neither will this program. Why? Because people are still in houses they cannot afford to own as they lied regarding their income to get the houses in the first place, and second, there is no personal recourse for lenders if they default. If these people shouldnt be in a house to start with, then let the mortgages default, or support ONLY those people that do qualify with real income and will accept recourse. In the meantime we are destroying our long term national economic strength with staggering debt, and not fixing the root of the problem.

Posted by m&m | Report as abusive
 

Of course it will work. It always works when the government redistributes imaginary wealth to reward greedy behavior. Look how well it worked with the banks and the auto companies.

Posted by Russ in PA | Report as abusive
 

The first part of the administration’s housing plan reduces the effect of FANNIE’S and FREDDIE”s 80% loan to home value requirement. The rule is being relaxed to allow refinancing in cases where the loan will be 5% more than the home value. This sounds good. But it is a timid imitation of FHA’s Streamline refinance program. The Streamline refinance program has been in effect at FHA since the early 1980′s. With a Streamline refinance, homeowners automatically qualify if they have made the last 12 payments on time. The loan to value question is not raised at all!! Neither is the borrower’s income a question. Who cares how the homeowner made the last 12 payments: they did it. They are going to be more likely to make the future payments if those payments are lowered. The administration’s current plan does nothing to help homeowners in neighborhoods where the values have fallen a lot. The FHA streamline rules would rescue many of them. And if the FHA rules are unworkable how have they survived at FHA for more than 20 years?

Posted by Lawrence M. Archer | Report as abusive
 

If our lovely Pres. Obama wanted to stimulate the economy he would offer forgiveness of monstrous my student loan, my mortgage isn’t that bad (SL is about the same as my mortgage) and it isn’t doing ME any good since I am currently unemployed (and have been for months).

I get to play ‘duck, duck, goose with my bills’ now…so at least I am having fun with it…

Kiki

 

He should stop what he is doing and start obeying Constitutional law. Do away with the income tax, as well as capital gains tax, no more credit for bonds, do away with fractional banking practices, audit the federal reserve and make them transparent, and do away with corporate trade structure that makes it easier to do business elsewhere in the world rather than here at home. I’m sure that The federal reserve and it’s congressional counterparts owe a great deal of money to the taxpayers. Since it’s creation in 1913 our dollar has been on a straight DECLINE every since. That should tell you something right there. We need sound representation and a sound currency and with that we will have a more transparent government. After the investigations, arrests and seizures of these criminals and their assets, it would be easy to pay off the taxpayers debts and do away with credit as a form of currency.

Posted by jason | Report as abusive
 

Is there any help for those of us who have been paying our mortgage/equity loans on time along with all other bills, but live paycheck to paycheck and would like help paying off your loans. It just doesn’t seem fair to only help those who over extended themselves and not help everyone out with thier mortgage debt.

 

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