Hopefully there's good news for struggling homeowners fom
President Barack Obama's new plan to try to stem the
rapidly growing number of home foreclosures in this
country. The plan of course does not help every homeowner
in need but the plan is a very positive step in the right
direction toward attempting to stabilize a rapidly
declining real estate market.
There are millions of people all over this country who are
losing their homes to the bank because they cannot afford
the mortgage. There are over two million Americans whose
homes have been foreclosed by lenders.
Earlier this year, President Barack Obama presented his
$275 billion mortgage rescue plan to attempt to help
distressed homeowners. Many feel the American dream is
being tested by this crisis that threatens the stability of
our economy and the stability of families and
neighborhoods, indeed the very fabric of this country.
The Presidents' plan could help over 9,000,000 homeowners.
One group it will help is made up of homeowners who owe
more on their mortgage than the house is currently worth.
Another group are homeowners who can no longer afford the
monthly mortgage payment due to ARM adjustments.
This year, approximately 1 in every 466 houses was already
in some stage of distress. When bank owned foreclosures go
on sale, they flood an already overly supplied real estate
market. We need to reduce the number of homes reaching the
market from bank foreclosures to help bring stabilization
to home prices.
Among other things, there are eligibility limits to the new
Presidents' plan, unfortunately, not every homeowner in
trouble will be helped. There are still going to be
millions of distressed homeowners that will foreclose. The
fact that distressed homeowners facing foreclosure cannot
go to court to declare bankruptcy and then change the terms
of their mortgages is a topic that Congress is addressing
and is actually considering rewriting the law so that the
judicial system would have authority to work out a
settlement with the bank to help homeowners stay in their
homes.
Mortgage bankers nationwide oppose these changes stating
that changes in the bankruptcy law could have expensive
consequences. They feel investors might not be willing to
buy US mortgages for fear that a judge may change the terms
on them.
They feel giving judges the ability to change the value of
home mortgages will force investers to require a higher
price for mortgages going forward, or in a worse scenario,
they will not make loans any longer.
Mortgages are often sold and resold to international
investors, who will be unwilling to change the terms of a
mortgage even when it's in everyones interests.
The Presidents new plan is limited to Americans who owner
occupy their homes. 2nd homes, or investment properties are
not covered by the new plan.
Many feel that some people will still be unable to pay
their home mortgages, even after the terms are changed.
They point out that OVER 20% of the people who had their
mortgages modified last year were still behind in their
payments.
Experts predict more than eight million foreclosures are
expected in the years to come.
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As a licensed Mortgage Broker and Real Estate Broker in
Charlotte, NC. for over eight years, I have seen the ebbs
and flows of the real estate market. I do feel confident
this economy will recover from this current downswing. For
more news on the real estate market and homes for sale in
the Charlotte, NC. area, please visit,
http://www.ilovemynewhome.net
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