I waited with anticipation for President Obama's Home Foreclosure rescue package. I wanted to know what I was going to get for my 75 Billion dollars. I listened to his speech and it sounded more like a political speech than a workable plan to rescue home owners. Lots of wind and very little substance.
I did find out that in addition to the 75 Billion for this project, there would be another 200 Billion go into Fanny Mae and Freddie Mac so they could fund 100% of the homes that would be refinanced under the FHA guide lines. Up to this point Fanny and Freddie only guarantee 80% of those loans with the other 20% were owned by the lender of choice.
This package is getting a lot of hype but I am reserving my judgment until I see how many people it is really going to help. Much of this hinges on voluntary cooperation and rather large mortgage write downs by lenders. What I did not hear was a way to address the issue of how to address the huge number of homes already on the market. This must be addressed in order to stabilize values and stop the downward spiral.
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