Loan Modification Plan (Obama)

[Dave Kennedy]

I've been listening to CNBC this morning and they have been releasing some of the plan to bailout homeowners.

It was just released an hour and half ago so the details are few and far between at this point but here are some notes.....

-Helps and estimated 4-5 million homeowners
-conforming loans owned or guaranteed by Fannie and Freddie.
-borrowers refi to lower interest rates
-no jumbo loans.

-$75 B stability initiative for at risk borrowers. Lenders need to reduce the amount on the loan to bring the ratio to 38% of the borrowers income. The government will then step in and subsidize more of that bringing the ratio down to 31%.

-Servicers to rework the loan will be paid 1,000 incentive by the govt and then another 1,000 in year two if the loan is successful and the borrower is current.

-The government will also pitch in 1,000 a year to the borrower to stay current on their loan. Effectively you get 1,000 a year if you don't miss a payment from the government. But this is only people loans who are reworked not people that have been paying and current all along.

-Government is going to double the amount of money to Fannie and Freddie so they can continue to buy up loan packages. Additional money not coming from TARP.

Thoughts......?

(This is not going to go over well here...jmo.) :D