On Friday, Citigroup and J.P. Morgan Chase said that they would temporarily hit the “Pause Button” on foreclosures.
Out of the $350 billion that is left, $50 billion of the last year’s bailout plan is going to be used to buy some time for homeowners that are currently having trouble paying their mortgage payments. This is definitely good news, because even I am guilty of criticizing the disbursement of these funds. It’s kind of like the “Hunt for Osama”. It was hot for the first few months, then everyone forgot about, so I am very glad to see that FINALLY this money is being put to good use.
Personally, I have heard so many clients that are being SCREWED (Escrow money being overcharged, incorrectly calculated, double payments put into effect, no negotiation of terms available, etc) by their current mortgage, its unbelievable! Mark my words, REGULATION AND PROPER EXECUTION of this will be the ONLY way this is going to work, unlike several false promises that have been given to millions of Americans this past year.
So what Obama plans to do is make each homeowner pass an affordability test. This, to the public’s knowledge so far, is not going to be a complicated thing. As long as the homeowner shows that he/she can make enough money to afford some sort of payment plan with the mortgage company, they should be in good hands.
Barney Frank, House Financial Services Committee chairman, requested that a suspension of activity (moratorium) be set in place until the new plan is finalized in the upcoming weeks, and expects that at least 90% of banks will follow suit to help the housing crisis.
Here’s a quick example:
Ready? Set? Change!
Thursday, February 5th, 2009It looks like 2009 has started off in a very exhilarating fashion, I’m sure you would agree.
We have our first African American president, Larry Flynt is asking for a $5 billion PORN bailout , Bernie Madoff got caught with his hand in a $15 billion cookie jar, and of course the Steelers won a very “action packed” SuperBowl.
So where does this leave us and what should you expect in ’09?
Well, for starters, Obama’s proposed $900 billion Stimulus Plan is still being negotiated in Senate, and from the way it looks, it’s going to pass. Many are wanting to know the dynamics of what this plan is, so I wanted to outline a couple of the top points you may be interested in:
1. Instead of $7,500, a $15,000 Tax Credit to First Time Home Buyers. This is still in the works, but looks good on getting approved.
2. Tax relief to those with middle, and low incomes, in order to restore consumer spending and confidence.
3. $1,500+ tax break to car buyers to get them back in the showrooms
4. Specific measures to relieve financial institutions of their troubled assets. (Where did the “The Bailout” money go last year?)
5. Defined tax breaks for businesses, especially those which encourage them to reduce their debt.
Now I slightly recall a $700 billion Wall Street Bailout plan that passed and that did NOT go the way it was supposed to, yet we’re still paying for that tab.
So where you stand on this? Is the US just writing blank checks to solve problems, or is the “Change” we’ve been waiting for?
Tags: $900 billion stimulus plan, fha houston homebuyers, obama
Posted in FHA Commentary | No Comments »