23 February 2009
Obama Housing Plan | $275 Billion for 9 Million Families
Posted by forex under: Business; Foreclosure; Forex; Money; Mortgage .
New Obama Housing Plan attempts to stem Foreclosures
President Obama unveiled his much-anticipated housing plan Wednesday to fight the real estate crisis, pledging up to $275 billion to help stem a wave of foreclosures sweeping the country.
“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—a crisis which is unraveling homeownership, the middle class, and the American Dream itself,” Obama said in prepared remarks released on Wednesday about his housing plan.
Obama, who on Tuesday signed a landmark $787 billion economic stimulus bill aimed at jolting the U.S. economy out of recession, was to formally unveil his housing plan at 12:15 p.m. EST in Mesa, Ariz.
The housing crisis has played a central role in the financial and credit turmoil now spread across the globe, with many homeowners saddled with mortgages they cannot pay.
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.
An Obama administration official said the total plan commits up to $275 billion for housing, including $50 billion from funds already committed in the country’s financial sector bailout. It aims to help up to 9 million American families under the housing plan.
Home Buyers Kicking Tires?
Mindful of critics who might charge that the scheme would help people who just took on far more debt than they could afford, Obama said his housing plan was aimed at “rescuing families who have played by the rules and acted responsibly,” refinancing traditional mortgages for up 5 million homeowners who now are close to owing more than their homes are worth.
It will also establish a $75 billion fund to reduce monthly payments for another 3 million to 4 million homeowners “stuck in sub-prime mortgages they can’t afford as a result of skyrocketing interest rates or personal misfortune,” Obama said.
The Obama administration’s summary of the housing plan said the plan could offer a buffer of up to $6,000 against value declines on the average home.