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

(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.”

[Images (2)]

[Quotes (1)]

A foreclosure sign blows in the wind in front of a home under foreclosure in Antioch, Calif. (AP Photo)

A foreclosure sign sits outside a home for sale in Phoenix, Feb. 17, 2009. (AP Photo)

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There’s 10 million households that aren’t being talked about, and they aren’t going to be helped at all.
- Christopher A. Viale, president, Cambridge Credit Counseling Corporation

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Guest

Mar 6, 2009 6:34 AM CST

They're missing an opportunity to help Americans who did not overspend on mortgages they cannot afford for homes they cannot afford. Homeowners who are NOT underwater and ones who have NOT bought homes they cannot afford should be able to qualify for supercheap new mortgages. Of course, these would require 20-35% equity in the property, not difficult for those who bought only what they could afford and followed the normal lending formulas.

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housing market • Freddie Mac • Fannie Mae • mortgage debt • mortgage lender • underwater • mortgage defaults • Obama administration • financial crisis • President Obama • foreclosures

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Obama Housing Rescue Plan Leaves Many Out in Cold