Feb
18

Obama Unveils $75B Mortgage Relief Plan

February 18, 2009

President Barack Obama has unveiled a $75 billion relief plan that would seek to keep as many as 7 to 9  million homeowners from  losing their homes to foreclosure.

“The American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighborhoods,” he said. “While this crisis is vast, it begins just one house and one family at a time.

Obama’s plan begins with a $75 billion Homeowner Stability Initiative.  This would provide a set of incentives to mortgage lenders that would hopefully convince them to help up to 4 million borrowers on the verge of foreclosure.  The goal would be to cut mortgage payments to sustainable levels which are defined as no more than 31% of a homeowners income.

Obama also said that the plan would not help those who bought homes with the express purpose of flipping them, buyers who signed on for loans that they knew they couldn’t afford or dishonest lenders who distorted the facts to potential naive buyers.

The plan, which Obama announced in Arizona, a state that has been hit particularly hard by foreclosures, would have a goal of cutting monthly mortgage payments to sustainable levels.  Read the rest of the story here.

Categories: Economy

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