President Barack Obama announced today a new U.S. government plan designed to help Americans who have fallen behind on their mortgage payments or are in imminent danger of missing a payment. The Homeowner Affordability and Stability Plan, includes both a modification program for at-risk borrowers and refinance initiative for Fannie Mae and Freddie Mac borrowers who are current on their mortgage payments.
An excerpt of the Plan from the speech by President Obama.
"First, we will make it possible for an estimated four to five million currently ineligible homeowners who receive their mortgages through Fannie Mae or Freddie Mac to refinance their mortgages at lower rates.
Second, we will create new incentives so that lenders work with borrowers to modify the terms of sub-prime loans at risk of default and foreclosure.
Sub-prime loans – loans with high rates and complex terms that often conceal their costs – make up only 12 percent of all mortgages, but account for roughly half of all foreclosures.
Third, we will take major steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages."
There are currently still some confusion and criticism regarding the Plan's details and how it will be implemented. We will keep you abreast of any details and how this plan will play out.
For more information regarding the Homeowner Affordability and Stability Plan, visit the White House's Blog.