"People with mortgages as high as $729,750 could qualify for help, and there is no ceiling on how high their income can be as long as they are in danger of losing their homes. Interest rates on loans could go as low as 2 percent for some. Many homeowners could see their mortgage payments drop by several hundred dollars a month, and some could save more than $1,000 a month."
"Administration officials estimate that the plan will help as many as four million people avoid foreclosure, at a cost to taxpayers of about $75 billion. In addition, the Treasury Department said it intended to follow up with a plan to help troubled borrowers with second mortgages, which many homebuyers used as "piggyback" loans to buy houses with no money down."
"The plan is bolder and more expensive than any of the Bush administration's programs, which were based almost entirely on coaxing lenders to voluntarily modify loans. While the number of loan modifications has climbed sharply, the number of foreclosures skyrocketed to 2.2 million at the end of 2008, a record."
Comments
The Ultimate Real Estate Industry Shill
Your President Barack Obama. We've always cursed past politicians for being industry shills, but this is a tough one to ignore. What a horrible use of $75 BB of taxpayer money. And for what? To keep people in a particular home which is underwater, still declining in value, and one where they will pay overmarket/subsidized rent to a lender for the forseeable future? Why is the word "foreclosure" so bad to so many people. Why, from a financial standpoint, do you really want to stay in a home you can't afford. Worst case with mailing the keys in is that you take a hit on your credit score. You know what - you probably shouldn't be borrowing too much money anyway. If you don't have the money, you can't afford it. What is wrong with renting?
The real topper is when collectively, we'll spend billions on "affordable housing" because other people "can't afford a decent place to live". So, the government solution: spend $75BB to prop up housing prices and then spend another $75BB to make them cheaper. Or spend nothing and get the same result which is that everyone will have a cheaper place to live (just maybe not owing).
Also, let's just ignore all the perverse incentives like anyone who decided not to partake in the housing ponzi scheme gets screwed, anyone who added a second or HELOC gets rewarded, anyone who knowingly overspent beyond their means gets a bailout, banks get a bailout, and who will ever write a mortgage again when a judge can modify it at will?