A New Half-Way Timid Economic Measure? This time the Home Foreclosure Prevention Package

[Better Believe It]

White House closes in on housing plan
Obama will unveil details of plan to help homeowners on Wednesday
By John W. Schoen
msnbc.com
February 13, 2009

The White House said Friday a much-anticipated plan to help struggling homeowners will be announced by President Obama in a speech Wednesday in Arizona.

The administration is working on a comprehensive plan to try to halt the ongoing wave of home foreclosures as part of its efforts to stabilize the financial system. The $50 billion package may include a program to buy up distressed mortgages at discount prices, subsidies to help struggling homeowners make their monthly payments and national standards for modifying home loans to more affordable terms.

The foreclosure prevention plan is part of a broader package of measures the administration is putting in place to help the staggering economy.

The foreclosure prevention package is expected to contain a number of measures designed to work in concert. One proposal would draw on $50 billion in funds already approved for the financial bailout to buy up millions of mortgages at a discount.

A $300,000 mortgage on a house now worth $200,000, for example, might be bought at a 30 percent discount. The homeowner then would be able to refinance the smaller mortgage with lower monthly payments. The government could then sell the loan back to investors, freeing money to buy more loans.

Of the roughly 10 million to 12 million households facing foreclosure over the next four years, the buyback plan could help between 4 million to 5 million to keep their homes, according to John Taylor, president of the National Community Reinvestment Coalition, who met this week with White House officials to discuss the plan.

Please read the complete article at:

http://www.msnbc.msn.com/id/29185060

Sounds good!

Just a second.

So 50 billion dollars out of the 350 billion TARP funds may be used to stop foreclosures. It's the foreclosure prevention package.

So why won't roughly 6 million to 7 million households facing foreclosure over the next four years be covered under this plan according to the National Community Reinvestment Coalition?

I don't know.

If the 50 billion is just a down payment to prevent evictions in homes this year and that much more money will be spent to stop the 10 to 12 million foreclosures over the next four years, that would be indeed be a bold and dramatic plan that all of us could support.

Stay tuned.

We'll find out on Wednesday.

Let's hope that no one is left out.