Yesterday President Barack Obama announced a $75 billion Homeowner Affordability and Stability Plan to help address the foreclosure crisis – the right cross in a one-two punch to help the housing market recover. The plan complements the new American Recovery and Reinvestment Act by promising to help up to 9 million homeowners refinance or restructure their current mortgage loans.
In short, the plan will:
1. Enable Fannie Mae and Freddie Mac to refinance loans owned or guaranteed by the GSEs.
2. Create for a $75 billion Homeowner Stability Initiative, with incentives for servicers, investors, and borrowers to make their loans work, provided the loan amount is at or below GSE conforming loan limits.
3. Provide more financial support for Fannie Mae and Freddie Mac, so they can make more loans at lower rates. The plan would double the potential Treasury investment in each GSE from $100B to $200B and raise their portfolio cap by $50 billion. Both steps will help keep rates low for all borrowers and could even lead to lower mortgage rates.
Now, it’s our turn to get in the ring. REALTORS® need to get out there and help our clients and all homeowners who need help to take advantage of these resources.
We have posted a Q&A on Realtor.org with details on who is eligible for help under the plan and how to apply. I encourage you to read it and pass the information along to your clients.
We all know that an economic recovery depends on a stable housing market. And, I don’t need to tell you that our businesses depend on our ability to keep people in their homes. With your help, I know we can score a knock out on the credit crisis once and for all. – Dick Gaylord, 2009 Immediate Past President