Obama Announces $275 Billion Homeowner Affordability and Stability Plan

Posted under Industry News on February 18, 2009

The Obama administration announced February 18 its Homeowner Affordability and Stability Plan that aims to offer assistance to as many as 9 million homeowners making a “good-faith effort to stay current on their mortgage payments,” while attempting to address the impact of foreclosures on communities and families.

The plan also aims to support low mortgage rates by “strengthening confidence” in Fannie Mae and Freddie Mac by giving $200 billion to the government-controlled mortgage finance companies. Those funds were made available through the Housing and Economic Recovery Act and do not use funds from this plan or TARP monies.

The plan, which is available to view on the Treasury Department Web site, also outlines a $75 billion Homeowner Stability Initiative, that could keep as many as four million families in their homes, and could give as many as five million families the opportunity to refinance their mortgages to take advantage of lower interest rates.

In prepared remarks delivered Wednesday in Mesa, Arizona, President Obama emphasized the plan’s aim to help “responsible families” and would not give “good taxpayer money after bad loans.

“It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell. It will not help dishonest lenders who acted irresponsibly, distorting the facts—distorting the facts and dismissing the fine print at the expense of buyers who didn’t know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford. So I just want to make this clear: This plan will not save every home.”

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