In Phoenix today, President Obama announced a new plan to address the foreclosure crisis, the next step in addressing the current economic situation. "In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen," President Obama explained. "But if we act boldly and swiftly to arrest this downward spiral, every American will benefit."
Through this plan, we will help between seven and nine million families restructure or refinance their mortgages so they can avoid foreclosure. And we are not just helping homeowners at risk of falling over the edge, we are preventing their neighbors from being pulled over that edge too – as defaults and foreclosures contribute to sinking home values, failing local businesses, and lost jobs.
But I also want to be very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell. It will not help dishonest lenders who acted irresponsibility, distorting the facts and dismissing the fine print at the expense of buyers who didn’t know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford. In short, this plan will not save every home.
But it will give millions of families resigned to financial ruin a chance to rebuild. It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone.
The President laid out the four key elements of the Homeowner Affordability and Stability Plan:
- Refinancing help for four to five million homeowners who receive their mortgages through Fannie Mae or Freddie Mac
- New incentives for lenders to modify the terms of sub-prime loans at risk of default and foreclosure
- Steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages
- Additional reforms designed to help families stay in their homes
If you're a homeowner, Whitehouse.gov has information about what options might be available to you, depending on the circumstances of your mortgage, as well as answers to some common questions.