Here's some news and reaction about the Making Home Affordable Refinance and Modification Options plan:
The Obama administration kicked off a new program Wednesday that's designed to help up to 9 million borrowers stay in their homes through refinanced mortgages or loans that are modified to lower monthly payments.
Borrowers, however, are being advised to be patient in their efforts to get help because mortgage companies are likely to be flooded with calls.
Government officials, launching the "Making Home Affordable" program also acknowledge that the initiatives are only a partial fix for a sweeping problem that has helped plunge the U.S. economy into the worst recession in decades. In fact, tens of thousands of homeowners in some of the most battered real estate markets — concentrated in California, Florida, Nevada and Arizona — won't be eligible for the two programs.
"It's not intended to prevent every foreclosure or to help every homeowner," a senior Treasury Department official told reporters. "It's really targeted at responsible homeowners."
There was also skepticism that banks would be willing to participate.
"I've just seen so many of the programs not work," said Pava Leyrer, president of Heritage National Mortgage in Randville, Mich. "It gets borrowers hopes up. They call and call for these programs and we can't get anybody to do them." AP
Planet Money's first take:So far, much of the conversation on Planet Money has been about whether homeowners who owe more than their houses are currently worth -- the 20 percent of families thought to be underwater -- can be enticed to stay in their homes, even with lower monthly payments.Freddie Mac's statement:
I wouldn't expect any given person with an outsize mortgage to be persuaded to stay put, just for the good of the neighbors. But I do think it's interesting to watch President Obama sell the plan to America that way. He's got two jobs: Get the homeowners to stay, and get the public to support his approach."Freddie Mac wholly supports President Obama's groundbreaking effort to stabilize our communities by helping millions of distressed homeowners obtain more affordable and sustainable mortgage terms. Bringing needed financial relief to America's homeowners is critical to the recovery of the economy here at home and across the world.
Freddie Mac's resources are aligned to make the Obama Administration's Making Home Affordable program a success. We look forward to working with lenders, servicers, nonprofits, the Administration, and the Federal Housing Finance Agency, over the coming months as this vital initiative is fully implemented and injects new stability into the nation's housing market."
To determine their eligibility under Making Home Affordable program, borrowers should contact their mortgage servicer, the company where they send their monthly mortgage payments. For more information about Making Home Affordable program go to www.financialstability.gov.
A summary of the details at WSJ.
A look at underwater owners (8.3 million owe more than the house is worth):CitiBank launches homeowner assist program. Before you watch, know that a cram down, now in front of congress, is a court-ordered reduction of the secured balance due on a home mortgage loan. Banks don't want that:
