Obama Mortgage Relief Plan
February 10, 2012 by staff
Obama Mortgage Relief Plan, A foreclosure sale sign sits in front of a house in Miami Beach, Fla., in this file photo taken in 2009. The long-awaited settlement provides mortgage relief to borrowers hurt by the US housing crash. Checks of up to $2,000 each are expected to reach 750,000 households who lost homes through the foreclosure process between 2008 and 2011.
The landmark $25 billion settlement between major banks and state and federal governments is aimed at doing more than just helping people who lost their homes through improper foreclosures.
It’s an attempt to fix the biggest weak spot in the nation’s economy. Althoughanlysts are unsure the cure will take, the outcome could help determine whether voters give President Barack Obama a second turn in office next fall.
By most measures, the economy is improving: Unemployment is down, consumer spending is up, and financial markets have regained the ground they lost in the 2008-09 financial crisis.
The housing market is the last holdout, with home prices nationwide down nearly 34 percent from their peak in 2006, according to real estate data firm CoreLogic. The average home is now worth what it was in 2003.
Although Thursday’s settlement originated more than a year ago as an effort to discipline lenders for improper foreclosures, it has evolved into a housing relief package.
Most of the money _ $17 billion _ is earmarked for people who are struggling to make their payments, chiefly by reducing the amount of principal on their mortgages. An additional $3 billion will be spent by the banks to refinance mortgages of homeowners who are current on their payments but owe more than their homes are worth.
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