President Barack Obama has announced a housing plan that would spend $75 billion to modify the loans of 4 million homeowners and would make it easier for 5 million borrowers with little equity to refinance into more affordable mortgages. The White House also wants to provide an additional $200 billion in financial backing to Fannie Mae and Freddie Mac, which theoretically would shore up the mortgage market as a whole. The financial industry was cautiously receptive to the housing plan, but some analysts said it would not help many borrowers facing foreclosure and millions more who owe more than their home is worth. According to Mark Zandi, chief economist at Moody’s Economy.com, the Obama foreclosure plan –by restricting assistance to loans that are no more than 5 percent over the current market value of the residence — would help fewer than 1 million of the 14 million homeowners who are “under water” on their mortgages.
From “$275 Billion Plan Seeks to Address Crisis in Housing”
New York Times (02/19/09) P. A1; Stolberg, Sheryl Gay; Andrews, Edmund L.
