Obama’s Foreclosure Prevention Plan Unveiled
Yesterday, the Obama Administration revealed that today would see the unveiling of a foreclosure prevention plan. The plan calls for $275 billion of the TARP funds approved last year to be used to directly lower mortgage payments for as many as 9 million Americans.
This new plan is a sharp departure from earlier attempts at forcing through loan modification. The main difference is that it actually helps those who have been making their payments and behaving responsibly. MarketWatch offers this on the Obama Administration foreclosure prevention plan:
You can lead a bank to money, but you can’t make it lend. That was pretty much the lesson of the first half of the Troubled Asset Recovery Program cash that went out to stabilize financial institutions. Very little of that dough ended up in the hands of Americans who could really have used it.
Now we have a mortgage-aid program that promises to do a lot better in that regard. Taking $75 billion from the existing TARP funds and earmarking for mortgage relief for homeowners who are at risk of falling behind on the loans, President Obama’s new plan is aimed at people who really need the help and who are in trouble through no fault of their own.
The plan is mostly aimed at homeowners who are struggling with their mortgage payments, though still making them, but whose home values have dropped, thus preventing them from taking advantage of refinancing opportunities that would ease their monthly burden. As many as 9 million households may benefit, helping prevent more defaults and foreclosures, and possibly putting a floor under tumbling home prices.
However, even the new plan can’t quite bring the financial markets back into the black today. But it’s better than dramatic plunge yesterday, after Obama signed the economic stimulus bill. The current economic stimulus bill also features measures that should help more ordinary Americans, as opposed to giving more money directly to banks.
April 29th, 2009 at 12:34 pm
[…] in February, the Obama Administration revealed a foreclosure prevention plan, called Making Home Affordable. This plan is aimed at helping home owners avoid foreclosure through […]
July 1st, 2009 at 10:57 am
[…] them from getting the help that they need. There is help for some, however. Barack Obama offered a foreclosure prevention plan back in February aimed at helping those who made good choices initially but find themselves in bad […]