With foreclosures at an all time high and home sales at an all time low President Obama announced his housing stimulus plan early this week. The proposed housing stimulus plan means that the lending industry is set to launch Obamas $75 billion dollar foreclosure prevention plan as early as late May or early April. The final details should be released Wednesday but basically homeowners with debts from car loans, credit cards, and bad mortgages will be able to modify or refinance their home mortgage loan to get lower monthly payments, regardless if they are in default on their loan or not. Even borrowers who owe up to 105% of their mortgage will be able to modify or refinance their home loan if their mortgage is held by Freddie Mac or Fannie Mae. Simultaneously homeowners who owe up to 50% more than their current home value will be able to modify their loans as well. This helps a lot of home owners who seen the value of their home or property drastically drop sue to the housing crisis. Lenders believe that the number of refinance applications will pour in as more homeowners realize that they are eligible for this stimulus plan. Hopefully, the housing market can see conditions get better as soon as April of this year. A lot of the mortgage industry strongly opposed and temporarily won by not letting the House pass the other part of the stimulus bill that would allow homeowners who do not have large debts, easier refinancing. The mortgage industry argued that it would force them to reduce the principal and interest rates for people who can afford their current mortgages, and that they would lose to much money. The $75 billion housing stimulus bill by Obama will help as many as 4 million homeowners who are currently facing foreclosure. This plan should also help property and home values rise as well as more homes are bought and less are foreclosed on.

-M Petrone

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