"Attached is an example of the President's Housing Plan that was in the NYT,
I hope you find it helpful. Also attached is our quick summary with appropriate
links to our web page that has all the White House explanatory material.
February 18, 2009 The New Housing Plan
President Obama's housing plan is expected to help as many as seven million
to nine million homeowners by making it easier for them to either refinance
their mortgages or renegotiate payments."
Removing a limit on refinancing for "responsible homeowners"
4 million to 5 million households.
The bill will remove the current restriction on Fannie Mae and Freddie Mac
that prohibits them from guaranteeing refinancing on mortgages valued
at more than 80% of the home's value. This will allow many more home
owners to refinance at lower rates.
WHO MAY QUALIFY
EXAMPLE
TODAY A family's home value drops to $400,000 from $475,000. The loan
balance at $337,460 is now more than 80 percent of the home's value,
making it difficult to refinance under current rules.
UNDER THE PROPOSALThe family can refinance to a rate of 5.16% from
6.50%, which would save $196 a month and $2,347 a year.
WHO DOESN'T QUALIFY
Those holding loans not owned or guaranteed by Fannie Mae or Freddie Mac.
Mortgages above a certain threshold -- $417,000 for single-family homes in
most areas and $729,500 in higher-priced regions.
Those whose outstanding mortgage debt exceeds 105% of their current home
value.
Helping renegotiate loan terms for "at-risk homeowners"
3 million to 4 million households.
The bill creates incentives for lenders to modify the terms of subprime and
other loans. Participating lenders will reduce payments to no more than 38%
of borrower's income, with the government matching further reductions down to 31%.
WHO MAY QUALIFY
EXAMPLE
TODAY A family's home value has fallen to $189,000 from $230,000 and its loan
balance is $214,016. Job loss has reduced household income and loan payments
can't be made.
UNDER THE PROPOSALThe family could modify the mortgage for five years, so
that payments are manageable. This would save $406 a month or $4,870 a year.
WHO DOESN'T QUALIFY
Mortgages above a certain threshold -- $417,000 for single-family homes in most
areas and $729,000 in higher-priced regions.
Homes that are not owner-occupied.
Those who apply more than three years after program's start.
Above information from: Guilbert Gates and Amy Schoenfeld / The New York Times
President Obama Announces Homeowner Affordability and Stability Plan
On February 18, 2009, President Obama announced his Homeowner
Affordability and Stability Plan designed to help 7 to 9 million families avoid
foreclosure by refinancing or modifying their mortgages. The plan also
strengthens the federal commitment to Fannie Mae and Freddie Mac
(the government sponsored enterprises, or GSEs).
Here are the key elements of the Obama plan:
1. Refinancing by the GSEs of loans that they own or guarantee. The GSEs
will work with their loan servicers to develop a streamlined refinancing program
for borrowers with loan-to-value ratios (LTVs) above 80 percent who now face
difficulty refinancing.
2. A $75 billion Homeowner Stability Initiative-with lender, servicer, investor,
and borrower incentives to make it work. The program is limited to loans at or
below the GSE conforming loan limits.
3. More support for the GSEs, including doubling of potential Treasury investment
from $100 billion to $200 billion for each GSE, to maintain their positive net worth.
The plan also raises the cap on mortgages that the GSEs may hold in their
portfolios by $50 billion to $900 billion.
Grand Rapids Ada Real Estate ~ Westbrook Realty
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The authors of the this blog write about Grand Rapids Real Estate,
the Greater Grand Rapids MI area, and what it is like to live in
West Michigan. We believe: Grand Rapids is a Great Place to Live!
Westbrook Realty Grand Rapids MI Real Estate
Contact Terry 616-292-7263
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