So here are the basics of the Obama Home Ownership Plan: (Source Obama's web site)
1. Stiff penalties for mortgage fraud – it’s estimated up to 15% of people who purchased homes during the boom lied about various pieces of relevant information, thereby creating a ripple effect. This is good for everything and everyone. Some mortgage brokers in particular knew what they were doing when they signed people up for ‘liar loans’. This has created a big problem for everyone.
2. A fund to help people refi their mortgages or sell them if they cannot afford them – while this has the remnants of a bailout which in general I am not a fan of, it certainly may help consumer confidence. If we keep this to people that TRULY got duped and not investors who made a bad call, it could help stabilize the housing market.
3. Creating new affordable housing – individuals that are being punished because of the things others did that created an unstable market and impossible lending standards may be able to buy a home.
4. 10% universal mortgage credit is tax relief! He’s sounding more like a Republican here.. I'm all for less taxes. Please, do, lessen all of our tax burdens. That will help fuel the economy. ALSO, it will help incentivize people to stay in their homes. The more people go into foreclosure, the bigger of a problem we will have. Yeah it will affect those earning 50k or less, but I want tax cuts for EVERYONE.. so this is great!
5. Mandating loan disclosure: many people complain that the mortgage documents are too difficult to read. If making it easier to read helps everyone be aware of what they’re signing up for, go for it.
6. A fund to help homeowners avoid foreclosure – This helps with refi costs for homeowners truly caught in the mess- not investors. The details of this aren’t clear yet… we will see how this one pans out.
All of this seems to be paid for by his fines on mortgage companies that commit fraud… not by tax payers.. at least thus far.
I don’t really see this as a bailout. It is transparency and tax cuts. He’s starting to sound like a Republican. ;)
Dani
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