Housing Stimulus Plan 101

 

Longer, warmer, sunnier days make everything seem more hopeful, don’t they? And along with the emergence of buds and blossoms comes the emergence of springtime homebuyers checking out the market. Here at RE/MAX of Cherry Creek, we’re also seeing a rush of homeowners looking to refinance — something made easier by President Obama’s recent Homeowner Affordability and Stability Plan.

                In a nutshell, the plan is designed to address the following problems:

•                     Due to falling property values, many homeowners cannot refinance into mortgages with lower interest rates.

•                     Nearly 6 million homeowners are facing foreclosure, primarily due to the current recession.

•                     The foreclosure epidemic is further depressing property values, with each foreclosure reducing nearby property values up to an estimated 9 percent.

 

                President Obama’s plan is expected to help nearly 9 million homeowners restructure or refinance their mortgages to avoid foreclosure using these three components:

 

  1. Provide access to low-cost refinancing options for responsible homeowners whose property values have dropped, leaving them with loan-to-value ratios too high for them to qualify for a refinance loan.
  2. Create a $75 billion Homeowner Stability Initiative for at-risk homeowners who are stuck in adjustable-rate mortgages and have seen their house payments rise to 40 or 50 percent of their monthly income. This program offers cash incentives to lenders and borrowers for working out loan-modification agreements that result in reasonable, affordable monthly mortgage payments that enable homeowners to keep their homes.
  3. Support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac, including increasing the Treasury Department’s funding commitment of the two agencies and its purchase of Fannie Mae and Freddie Mac mortgage-backed securities.

 

                Want to know more? Give me a call, and I can direct you to a knowledgeable local lender who will determine whether you can benefit from these programs. This season of new beginnings could be the ideal time to refinance or purchase a home.