Washington Report: Outlines of Stimulus Plan by Kenneth R. Harney

Realty Times contributor Kenneth R. Harney outlines the stimulus plan as it affects lenders and borrowers. The 3 key points

1. 3 to 4 million borrowers whose loans are owned by Fannie Mae or Freddie Mac will be eligible for rapid refinancings if equity is inadequate under normal guidelines. "Many of these owners will get new fixed, long-term rates in the low five percent range, improving their chances of staying out of default and foreclosure."


2. "An aggressive $75 billion outreach effort to keep millions of debt-laden, seriously delinquent owners out of foreclosure." Participating lenders and servicers will receive co-payments from the government that will reduce the monthly maximum housing expense from 38 % to 31 %.

3. Fannie Mae and Freddie Mac "will each receive $200 billion of additional injections of capital from the government, and the Treasury will continue to purchase their mortgage backed securities to keep interest rates low for all borrowers."


Says Harney,

It will be weeks and months before we begin to see just how effective the Obama housing relief effort is in stabilizing prices and preventing foreclosures.

Read the full report here.




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