Hope for the President’s Home Affordability and Stability Plan
by Michelle on February 20th, 2009
As President Obama made clear in his speech in Phoenix, the on-going foreclosure crisis is having huge ramifications for the entire economy. Not only are responsible homeowners at risk of foreclosure being hurt, but the situation is negatively impacting their neighbors—who may not even have a mortgage or own a home, local businesses and the communities in which we all live and work. A landmark Chicago study cited by President Obama in his speech found that for each foreclosed home on a one quarter-mile radius block, the home values of adjacent properties can decline by up to 9 percent. The crisis means that cities and towns are losing tax revenues, which means everyone who depends on their services is hurt. This crisis is no longer—if indeed it ever was—limited to “a bunch of irresponsible people who bought or sold more home than they could afford.”
The President’s Home Affordability and Stability Plan substantially enhances Fannie Mae’s and Freddie Mac’s ability to help homeowners whose loans they own or guarantee, and establishes a system under which all lenders and servicers—including those, like ShoreBank, who hold loans on their books—will be incented to work with homeowners to provide affordable modifications for loans on the house they live in. ShoreBank already has a loan modification program in place, so if you are a homeowner with a ShoreBank loan that you are having trouble paying, please get in touch with us as quickly as possible. One of the valuable lessons we have learned since we started our Rescue Loan Program in 2007 is that too many homeowners, for whatever reason, wait until it is too late to take actions that could save their home from foreclosure. And while we view bankruptcy as a last resort, we agree with President Obama that the Bankruptcy Code needs to be modified to allow judicial modification of loans on a primary residence.
Going beyond what President Obama has announced, I hope the additional $200 billion the Treasury will make available to Fannie and Freddie will encourage them to buy more of the loans on the books of ShoreBank and other lenders. That will enable us to make loans to new homeowners—the new loans that are so critical to stabilizing the housing markets.
The speed and efficacy with which the President’s entire program will be implemented depends on the capacity and willingness of servicers and lenders, as well as borrowers, to make use of these new tools and to work together. And that, in turn, depends on both stopping the hemorrhaging of jobs and stabilizing the banking system. We’re pleased this Administration is working hard on all these fronts.
For additional information on how the plan may help you, click here. Or listen to this.
Tags: community development, economic predictors, green banking, home affordability and stability plan, ShoreBank, triple bottom line
[...] homeowners whose loans they own or guarantee, and establishes a system under which all lenders and Read More|||Is this mortgage eligible for the Homeowner Affordability and Stability Plan? No. For example, if [...]
[...] homeowners whose loans they own or guarantee, and establishes a system under which all lenders and Read More|||Is this mortgage eligible for the Homeowner Affordability and Stability Plan? No. For example, if [...]
[...] homeowners whose loans they own or guarantee, and establishes a system under which all lenders and Read More|||Is this mortgage eligible for the Homeowner Affordability and Stability Plan? No. For example, if [...]
[...] homeowners whose loans they own or guarantee, and establishes a system under which all lenders and Read More|||Is this mortgage eligible for the Homeowner Affordability and Stability Plan? No. For example, if [...]
[...] homeowners whose loans they own or guarantee, and establishes a system under which all lenders and Read More|||Is this mortgage eligible for the Homeowner Affordability and Stability Plan? No. For example, if [...]
[...] Hope for the President’s Home Affordability and Stability Plan … [...]
This site is unusually helpful on the topic of loan modifications, since other information online (in many cases direct from the U.S. Treasury and related websites) is on-point but still either biased towards hyper-technical readings of the Plan or a watered-down version intended for an uneducated public. I also found a site HomeAffordPlan.com which seems to bridge the gap. HomeAffordPlan.com’s calculator is superior to the Treasury Dept’s calculator on their new consumer website. This website seems like a MUCH faster avenue for eligibility determination, instead of the toll free number found on the typical mortgage statement. Differences b/w the calculators that I noted were:
1) The Treasury’s calculator does not give an analysis based on the persons specific financial situation. The calculator at homeaffordplan does, and does so for free without asking for identifying information.
2) The government calculator does not mention the incentives available to the borrower of the $1500 payment and a $5000 reduction in principal.
3) Homeaffordplan’s calculator results alert users if they will be required to undergo credit counseling in order to participate in the program.
Hope the above helps impatient borrowers who properly benefit under the Plan.
Thanks for telling us about this calculator reference Gillian. It is great to see that there are entire blogs devoted to the Home Affordability & Stability Plan. I would be curious as to your thoughts on the Bankruptcy Code?
The governement is doing their best to get loan modificed to assist with the mortgage meltdown. Your blog post is very well constructed and we hope the government is able to help. I am adding your blog to my reader so I can keep up with your posts. Thank you.
I live in Palm Beach Cty and my home is valued less than what I owe I make 8.00 an hour and I need help can some one PLEASE call me 561-214-0081 or email me so I can go to the correct source for help