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Relief for Homeowners

Posted by Diane H. Blackwelder, CFP® on 2 March 2009 | 0 Comments

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The deep contraction in the Nations economy and in the housing market has created devastating consequences: 1,450 homes fell into foreclosure in Berkeley, Charleston, and Dorchester counties during the final four months of 2008 and the rate of foreclosures is expected to go up.  Responsible families who make their monthly payments on time have seen values fall, and are unable to refinance at lower mortgage rates.  Meanwhile, workers have lost jobs or suffered a dramatic drop in income, and are struggling to stay current on their mortgage payments.

 

The present crisis is real, but temporary.  As home prices fall, demand for housing will increase, and the housing market will ultimately find a new balance.  The Obama Administration believes in absence of decisive action, the spiral will intensify, forcing lenders to foreclose, pushing home prices lower, reducing the value of personal savings, and making it harder for all families to refinance or sell their homes.

On Wednesday, February 18th, President Obama announced The Homeowner Affordability and Stability Plan.  The program will be available March 4, 2009.  The key components are:  

Affordability:  Refinancing for Responsible Homeowners

Eligible borrowers who are current on their mortgages, but have been unable to take advantage of lower interest rates because their home values have decreased, may have the opportunity to refinance.

Stability:  Helping At-Risk Homeowners Stay in their Homes

This initiative is intended to help responsible homeowners who are struggling to stay in their homes because of the current recession (loss of job or reduction in income).  The borrower does not need to be behind on their mortgage payments to qualify.

Support:  Strengthening Confidence in Fannie Mae and Freddie Mac

Using funds authorized by Congress in 2008, the Treasury Department is increasing its funding to Freddie Mae and Freddie Mac to ensure strength and security of the mortgage market. 

To find out more about how the program works and determine if you may be eligible, click here.  For more detailed information visit www.FinancialStability.gov

 
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