Well if you were like me sitting in my house watching the Presidential debates last night you were probably surprised (ok I thought I would fall out of my seat) to hear John McCain drop a bomb...a substantial new program for homeowners. I was sitting there wondering:
- How many bailouts can our economy handle?
- What are the details of this plan?
I heard New's pundits say the plan would cost $300 Billion dollars (Does anyone else remember when that was considered A LOT like of money?
Is anyone else getting numb and having a hard time keeping up with all the blank checks being written...$700 Billion here, oh I mean $850 Billion after pork...now $300 Billion more ).
Part of me thought, "I've gotta get a money printing machine like the Government has - if only our personal budgets worked that way". Now I'd definitely love to see our Pinellas Real Estate home prices stabilize, however, I seriously worry about the "unintended consequences" when the government start "managing our real estate market". This plan is targeted at home sellers facing foreclosure and those who own homes that are now worth less than they owe, hence the negative equity position. If you're not sure what your neighborhood values are doing - Get today's Pinellas Real Estate Market Report , a FREE service that gives you real time results based on the Pinellas Suncoast MLS today and see graphs and info for YOUR actually Pinellas County neighborhood.
John McCain's proposal for Home Sellers Facing Foreclosure
McCain's says the plan's goal is to keep families in their homes, avoid foreclosures, save failing neighborhoods, stabilize the housing market and attack the roots of our financial crisis. (We'd all like to see the housing market stablized)
Who benefits from new Home Mortgage Plan?
America’s families are bearing a heavy burden from falling housing prices, mortgage delinquencies, foreclosures, and a weak economy. (The assumption is because the had the wrong mortgage)
How will the Home Mortgage Plan work?
- For those that cannot make payments, mortgages must be re-structured to put losses on the books and put homeowners in manageable mortgages.
- Lenders in these cases must recognize the loss that they’ve already suffered.
- The McCain Resurgence Plan would purchase mortgages directly from homeowners and mortgage servicers, and replace them with manageable, fixed-rate home mortgages that will keep families in their homes.
- By purchasing the existing, failing home mortgages the McCain resurgence plan will eliminate uncertainty over defaults, support the value of mortgage-backed derivatives and alleviate risks that are freezing financial markets.
Who qualifies for American Home Ownership Resurgence Plan?
The McCain resurgence plan would be available to mortgage holders that:
- Live in the home (primary residence only)
- Can prove their creditworthiness at the time of the original loan (no falsifications and provided a down payment).
What kind of new mortgage would home owners get?
- An FHA-guaranteed fixed-rate mortgage at terms manageable for the homeowner. (I'd love to know what this means in practice not theory)
What will this Home Owner Mortgage Plan Cost Taxpayers?
- The direct cost of this plan would be roughly $300 billion because the purchase of mortgages would relieve homeowners of “negative equity” in some homes.
- Funds will come from Congress recent financial market stabilization bill;
Their believe is that this plan could be implemented quickly as a result of the authorities provided in the stabilization bill, the recent housing bill, and the U.S. government's conservatorship of Fannie Mae and Freddie Mac. It may be necessary for Congress to raise the overall borrowing limit of FHA loans.
So I'm curious - do you think this plan is a good thing or a bad thing?