Obama Housing Plan

There's been a lot going on lately (as I'm sure you know) so I haven't been writing as much as I'd like. President Obama signed in to law the American Recovery and Reinvestment Act of 2009 and there are some major changes on the horizon for the housing industry. A few days ago a document was released on the US Treasury web site that outlines the administration's plan to help/save the housing market. It's definitely worth looking at and reading for yourself. Click here to view the document.

There are three main ways the govt. is planning on helping out.

First, they are going to try to help people refinance in to lower interest loans. Many people are having trouble refinancing now because the values of their house has gone down and they no longer qualify with the stringent requirements laid out by the banks. Big brother is going to try to help you out.

Second, the govt. is going to try to get your servicer to work with you if your drowning by incentivizing them to modify your loan. They are not going to use any of the $75M earmarked for this to help out investors or speculators- this is just for the people that live in their homes and can't make their payments. I think that this is the most noble part of the plan. Now they are going to talk to you and try to work something out BEFORE you default on your loan. I think this could really save our butts if they roll it out right.

Third, they are going to strengthen Fannnie and Freddie (FNMA, FHLMC) by increasing the total amount of loans they can fund be $50B to $900B. That's a lot of money. There are other parts of this- including the rumor of possibly nationalizing the agencies, but we'll see.

If you read the full document (3 pages) you will notice that there aren't really any details. They are slated to release the plan details on or around March 4th. I'll know more then!