Socialize
President Obama recently unveiled the Homeowner Affordability and Stability Plan, which will offer assistance to as many as 9 million homeowners. The Plan only applies to primary residences, and loans in the Plan cannot exceed Freddie Mac/Fannie Mae conforming loan limits. The Plan has three components:
1. For owners who still have equity in their homes, but no longer have the 20 percent equity needed to refinance, and who have conforming loans owned or guaranteed by Freddie Mac and Fannie Mae, will be allowed to refinance their homes, even if they do not have 20 percent equity left in the house. This will assist an estimated 5 million homeowners.
2. Entitled the “Homeowner Stability Initiative”, this component is designed to assist homeowners who are “underwater†on their mortgages; that is, the house is worth less than the mortgage(s) against it. This initiative will bring together lenders, servicers, and the government to share in the cost of modifying the loan. This Initiative also creates clear and consistent guidelines for loan modifications that can be implemented across the entire mortgage market. An estimated 3 to 4 million homeowners will benefit from this component of the plan.
3. The third component of the Plan is to support low mortgage rates by strengthening Fannie Mae and Freddie Mac. The Obama Administration will also work with Fannie Mae and Freddie Mac to support state housing finance agencies in serving home buyers.
NOTE: This summary of new laws is for general information only, and should not be interpreted as legal or tax advice, nor should these summaries be applied to any individual situation. Prior to acting, please consult your legal or tax advisor for information on how any of these laws affect you, your property or your decisions.