The plan that President Barak Obama spoke about is supposed to put $75 billion to work in an effort to tackle “a crisis unlike any we’ve ever known”. The President spoke at a high school outside of Phoenix Arizona, which has one of the highest foreclosure rates in the country.
President Barack Obama said his $75 billion plan to tackle “a crisis unlike any we’ve ever known” in home foreclosures is necessary to help save the economy.
The plan seeks to prevent up to 9 million Americans from losing their home, and while it won’t save every home, Obama said that it will prevent “the worst consequences of this crisis from wreaking even greater havoc on the economy.”
The plan is intended to help home owners who owe more than their houses are currently worth, in particular those on the edge of foreclosure. This bailout, Obama says, is intended for “families who played by the rules and acted responsibly”
The program will allow mortgage banks to modify their loans on primary resideneces, and is expected to help 5 million borrows refinance. Included in this are incentive payments to the mortgage lenders.
In addition, President Obama is backing laws to allow bankruptcy court judges to readjust mortgage terms, which some lenders oppose, saying that it will drive intrest rtes higher.
Foreclure rates for 2008 are more than alarming at 2.3 million nation wide, having increased 81 percent from the year prior. Some financial experts fear that the number could continue to soar.
This announcement comes on the heels of the $787 billion legislation for a mix of tax cuts. Which since World War II has been the largest public spending program by the U.S. Governement.
Mon, Mar 9, 2009
Bankruptcy, Mortgages