Examining the Obama Housing Recovery Plan is like watching a foreign film. You may not understand it at first, but upon second glance, it starts to make sense. Here are the five main advantages:
1. The goal and main benefit is that it provides assistance to homeowners who wish to stay in their homes. The sour economy has made it tough for many homeowners to refinance because for most, their equity has dried up and they are unable to do so. This plan also helps those who want to do a loan modification but may have lost income due to the current recession and presently do not qualify.
2. The Plan only helps Homeowners wanting to stay in their homes. Investors must look elsewhere.
3. The Initiative Aids Neighborhoods. Because a foreclosed home often attracts vagrants, vandals and graffiti, not to mention being an eyesore with the dried grass landscaping and yellowed newspapers piled up on the stoop, stopping a home from becoming a foreclosure benefits the entire neighborhood. Not to mention the rock-bottom values that the foreclosed home will get from the new purchaser.
4.Supports Homeowners at Eminent Risk. Usually a homeowner does not qualify for loan modification unless he can show that he is behind by several payments. This new plan provides support for households at risk - even though the homeowner may NOT yet be late on his mortgage payments.
5. The Obama Housing Fix-it Plan hopes to make total monthly debt payments affordable. The approach is to attack the homeowners total debt, and create a payment that the homeowner can keep. Using the power of Fannie Mae and Freddie Mac in conjunction with the Treasury Department, the plan offers to make a homeowner's debt more sustainable.
The goal of the Obama program, in a nutshell, is to lend security to the current volatile financial markets. The Treasury must placate nervous lenders who wish to pull the trigger on non-performing assets out of fear that home prices might fall even further if they wait, but stop the market from plunging further so that new purchasers may buy. In other words, lately a purchaser with good credit is finding it difficult to purchase a home because of lender concerns about the depreciating values in the marketplace. The Obama plan addresses both issues in one fell swoop.
s there more to the Financial Stability Plan? Do most foreign films have sub-titles? Yes!. There are incentives for people who help to successfully modify home loans, principal reduction payments for owners who stay in their homes for five years and even incentives for lenders who postpone foreclosures.
By assisting responsible homeowners as well as the millions affected negatively by the recession, the Administration is hoping to jump-start the economy as well. The 75 billion may have an effect that is seen as quickly as June 2009. For this reason, many savvy investors are purchasing property and renting it out. This may prove to be a smart play to help revive your 401k nest egg.
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