Posted on 04/28/2009 7:51:11 PM PDT by Lorianne
The Obama administration unveiled an expansion of its $75 billion foreclosure prevention plan yesterday, providing new subsidies to mortgage lenders and investors.
Under the expanded plan, some homeowners could see their payments fall significantly and the interest rate on their second mortgage pushed down to 1 percent. The announcement comes nearly two months after the administration launched the housing program, called Making Home Affordable. While officials said some borrowers have already received help, the foreclosure rate is rising and it could be months before the program begins to have an impact.
The new efforts address, in part, criticisms from consumer advocates that the administration's housing plan did not go far enough and that borrowers still face too many barriers to receiving help.
(Excerpt) Read more at washingtonpost.com ...
Thanks a billion.
SECOND mortgage forbearance? Come f’n on—that is ridiculous. We’re not talking unfortunate but otherwise prudent homeowners here.
>> interest rate on their second mortgage pushed down to 1 percent. <<
WHAT? ONE PERCENT??? Why should those who used their houses as an extra credit card get a virtually no-interest loan?
Excerpt:
The administration’s housing plan pays lenders to help borrowers stay in their homes by modifying their mortgages to an affordable level. But, the plan as first announced in February applied only to primary mortgages. Now, lenders will be eligible for payments when they modify the terms of a second mortgage, including a home-equity line.
About 50 percent of at-risk borrowers have a second mortgage, which can make it difficult for them to afford their homes even after payments are cut on their primary mortgages. Second mortgages were popular during the housing boom for buyers who could not afford big down payments.
Under the new plan, lenders would receive $500 for modifying the second mortgage, plus $250 a year for three years if the loan remains current. The borrower would be eligible for $250 a year for five years to lower their principal balance. The borrower could have the interest rate lowered to 1 percent, depending on the type of loan, with the government sharing the cost of the rate reduction.
Senior administration officials said they expect the second-mortgage program to help 1 million to 1.5 million of the up to 4 million households expected to be covered by the wider loan-modification program. The program, which will take several weeks to get running, will be paid for through
This is ridiculous!
Because they deserve it ...
Don’t ask ... just pay yer taxes and shut up.
A thread earlier today featured a transcript from Rush’s program where two different people said they called the phone number on the website and got ambulance chasers instead of government people, and one got ripped off.
In some cases we may actually be - many second mortgages were used in lieu of PMI for under 20% down...
Regardless this is ridiculous.
I am gonna puke!
I Sure don't want kids to feel like they must stay in a Zimbabwe.
I would too, but I couldn't even eat after I read this.
I was gonna say I wanted the government’s money tree then I remembered that tree is us, our kids and grandkids.
My next door neighbor personifies this. ARM mortgage, took a 2nd to buy a Navigator. ARM readjusts to 10.8%, foreclosure inevitable.
That 1% won’t cover the cost of the refinancing.
Umm, no, the TAXPAYER'S will be paying lenders! And we know who they will be bailing out. Mostly Obama voters!
I have had enough of this crap!
Okay, so someone loses their job, has been current on their mortgage but cannot pay. They go to the bank...will the banks work with the person so that foreclosure is not likely? I have some friends in this situation.
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