One-Two Punch for Homeowners, Posted By Dick

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 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

  1. This needs to be changed! Fannie Mae and Freddie Mac are going to stop any benefit and progress that the Stimulus Package is intending to have!!!! Fannie Mae and Freddie Mac are going over-board!
    “Fannie Mae and Freddie Mac are both toughening their credit score and down-payment rules as of April 1. In response, major lenders are already factoring in the higher fees, which reduces the effectiveness of the stimulus efforts. Under the new guidelines, buyers with down payments of less than 25 percent will be charged a three-quarter point add-on penalty, no matter how high their credit score. Buyers of duplexes, where one unit is owner-occupied and the other is rented, will be charged a 1 percent add-on. Refinancers who take cash out will be charged as much as three points if they have a low to moderate equity stake. Freddie spokesman Brad German says the loan categories and credit risk combinations targeted by these fees “default at four to eight times” the rate of other mortgages backed by Freddie. “We have to manage these risks appropriately,” he says.”

  2. theresa allen

    I am a real estate agent in Ohio.
    I am surprised and even angry that in the middle of the forclosure crisis, the housing market conditions, and the mortgage lender issues, that no one is talking about demanding reform in the “short sale”, and the “deed in lieu of foreclosure” process.
    It is too long, and bureaucratic!
    If you would ask any agent,seller,or buyer that has had to endure the 3,4 or more months of waiting for an answer from a lender, you would find how frustrating, and many times fruitless the process is.
    Thousands of properties could be saved from foreclosure if lenders would cooperate quicker with sellers who have a buyer ready to close on a contract that has already been negotiated.
    The seller sells instead of being foreclosed on, the lender gets the loan off their books, and a buyer purchases a new home, all of which helps to get this housing market moving forward again.
    I am asking as a member of NAR, when will this issue be brought to our elected officials as a priority to help sellers from forclosure, and get this housing market moving again?