Obama Housing Rescue Plan Leaves Many Out in Cold

Criteria keep many who need help from refinancing under the plan
By Clay Dillow,  Newser Staff
Posted Mar 5, 2009 8:40 AM CST
A foreclosure sign blows in the wind in front of a home under foreclosure in Antioch, Calif.    (AP Photo)
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(Newser) – A large swath of Americans will see no help under the Obama administration’s housing rescue plan, the New York Times reports. While designed to prevent 3 million to 4 million foreclosures through loan modifications, the plan doesn't cover those whose loans aren’t backed by Fannie Mae or Freddie Mac, or those who owe more than their home’s value on loans more than $729,750 through other lenders.

Around 20% of the 50 million US mortgage-holders owe more than 105% of their home’s value, another disqualifier from refinancing under the Obama plan. “The refinance portion of the plan is set up so it provides the least help for the people who need it most,” one expert said. “We’re missing an opportunity to help many more Americans.”