obama foreclosure freeze
What does this Rate Freeze Look Like – Who Qualifies?
A proposed 5 year rate freeze for sub-prime borrowers whose mortgage loans were originated between January 1, 2005, and July 31, 2007, with rates that are due to reset between January 1, 2008, and June or July of 2010.
What are the other requirements for this proposal?
Borrowers must be able to afford their existing rates and be current on their payments. Under the proposed plan, homeowners who have demonstrated that they are a reasonable credit risk but who could not afford their house payments with higher rates would qualify for “fast-tracked” loan modification and a 5-year interest rate freeze.
Apparently, borrowers who have fallen behind on their loan payments might still qualify for the freeze, but they would face more stringent stipulations before receiving any such loan modification.
Commentary
Whether or not this plan will make any significant improvement to that rate of defaults really remains to be seen. One thing that stands out is that it is not going to bail out every struggling homeowner. In my market it’s not just the rate adjustments that are problematic. It seems to me that loose lending standards allowed borrowers to buy more of a home than they could really afford. I use the term really because obviously they could technically afford the home or they wouldn’t have qualified for it in the first place. Not ground-breaking news in a nation that spends like no other. Who doesn’t want the biggest bang for their buck? As a broker, that is one thing that I don’t like to see my clients do. The products were out there for the taking. If people were maxed out from the beginning there’s really no margin of error once they fall behind. How many of these type of situations will be addressed by the plan?
My feeling is that it’s not just an ARM problem. Furthermore, one might ask, “How is this plan fair to those conventional borrowers who have or will incur rate adjustments according to the terms of their loans, but are not getting the benefit of any rate freeze?” Sounds like a class action lawsuit waiting to happen.
Shannon Luscher
VP Elite Mortgage Solutions, Inc.
Visit the Elite Mortgage Daily Blog for Mortgage News & Insights at [http://elitemortgagesolutionsdailyblog.com/] Wisconsin borrowers can find more information about rates and products by visiting my comprehensive website – http://www.elitemortgagesolutions.com/
How will Obama’s $825 billion stimulus help the average citizen?
I just don’t see how an average citizen will benefit from the $825 billion stimulus. As we have seen, almost all of it will go to CEO’s of failing companies. It does little to help the ordinary citizen get job or pay bills.
Unemployment will keep increasing, and so will foreclosures and car repossessions. Furthermore credit market continues staying frozen with banks refusing to give further loans (even after getting bailout).
So how will the $825B lift economy? i just hate the idea of giving billions of taxpayer dollars to companies that are failing. They show no sign of improving and again they will fail. So why not just let them go out of business like circuit city and similar?
average citizen meaning a person having bachelor degree, high school diploma or no education at all.
It won’t…I happen to BE “an average citizen” as is my husband…This will do nothing for us but raise our taxes, which will make our paycheck smaller.
Financial Crisis: Obama Calls For 90 Freeze on Foreclosures
POLITICAL HOT TOPICS: Tuesday, June 8, 2010
The CNN Washington Bureau’s morning speed read of the top stories making news from around the country and the world. WASHINGTON/POLITICAL For the latest political news: www.CNNPolitics.com CNN: Crucial contests from coast to coast Tuesday A number of high-profile primary battles highlight races in 12 states Tuesday, including a senator trying to save her political [...]