On Wednesday, President Obama unveiled the mortgage relief program the government will be issuing, to help slow the massive trend of home foreclosures and help consumers in modifying their loan. On Wednesday, the Obama administration launched the $75 billion plan, which now includes the ability to help those who are behind on their payments and close to foreclosure to participate in loan modification. The new plan aims to reduce principal payments as well as interest rates for those who qualify for the mortgage help.
The government is offering cash incentives to financial institutions who participate in the program, which will only modify loans that are single dwelling mortgages up to $729,750 that originated before January 1, 2009. If you have stayed current on your loan, you may be eligible for up to $5,000 dollar of principal reduction, which could greatly affect your monthly payment. Also, those struggling could see their interest rate moved to as lows as 2%, depending on the unique condition of the loan and the consumer. The goal is to help both those who have remained current on the loan, as well as though who have fallen behind in payments.
This is a very big step in the loan modification process and in helping consumers to refinance or modify their loan. If you have not looked into what options can be done with your current mortgage, contact a representative today to find out what can be done with your loan. We will continue to keep the most up to date news dealing with all mortgage and loan modification on the site as soon as it becomes available. Click Here to begin the process of getting your loan modified today!
The government is requiring major US banks who are eligible for TARP funds to participate in frequent “stress tests” to show how stale the financial institution is in case of severe economic turmoil The tests will entail many scenarios of which is foreseeable in the near future if the economy continues on the trail it’s on, and show how well the bank will be able to perform in such an environment. Some aspects of the test include a scenario if:
Bank stocks experienced a strong rebound in Tuesday’s trading as the The Fed Chairman Bernanke addressed the nation and assured investors that though the recession would linger longer, banks were going to survive. In response to the remarks, Bank of America and Citi Bank’s stock shot up over 20%. This rise in stocks puts an end to the 6 day selling streak the Dow experienced as well as the slaughtering of financials we have seen the past week.
The past week, a lot of changes have been made in Washington and it looks like many more are to come in helping consumers to modify their loans. Last week, President Obama announced his initiative to get all commercial banks to work with customers and their mortgages to find a result that is fair to both the lending institution and the consumer. Considering many of the banks are receiving government aid (or will be shortly), a lot of the banks are already required by the government to work with customers in loan modification. Also, it is rumored that the recent decision for Citi bank to allow bankruptcy judges to modify loans may spread over to other lending institutions in the near future.
During another downward trading day for Wall Street on Friday due to more speculation of the commercialization of banks, President Obama’s press secretary held a media conference in which he said that the best option for commercial banks was to remain under private ownership and that bank commercialization was not being considered. Such an announcement caused a big turn around for several of the commercal bank’s stock price as some nerves were put to rest.
On Wednesday, President Obama announced his new plan to spend up to $275 billion on a plan to help fight the disease of foreclosures, which has been spreading in every market of the US. It is estimated that by 2012, over 8.1 million homes, or 16% of all houses with mortgages, could be in foreclosure. You can see why this has been on Obama’s agenda from the very beginning. A failure to come to the rescue could be catastrophic for the US markets for years to come.
On Wednesday, February 18th, President Obama plans to outline his plan to help subsidize mortgages in his attempts to try and slow the massive foreclosure hitting the US. With the huge increase in housing foreclosures this past year and the expected amount for it to continue to increase, President Obama has been working with banks to try and find a resolve to the decaying real estate problem.
Big news from Washington hit media today as it seems the Obama administration is working to put together a plan to help subsidize mortgages to help reduce the foreclosure count for homes. Their theory is that by helping to insure certain mortgage back debt, they will instill more confidence in banks and help allow them to start lending more. Just as news hit the public, the stock market shot up in its remaining 45 minutes to almost eliminate an earlier 3% deficit in the Dow.
On Tuesday, February 10th, Secretary Geithner is set to unveil the new plan to help buy toxic assets from banks in order to build up the strength of their balance sheet. After a few weeks of consideration of different strategies, it seems like the treasury is going to introduce a program where they will encourage private equity to invest in troubled assets to help get them off bank’s books. To help encourage this, the government is offering protection of additional losses in the assets so that if they did continue to fall in price, the investor would be protected. Also, they are planning on allocating anywhere from $50-$100 billion of the remaining $350 billion in TARP funds to assets in foreclosure.
Recent news has been talking about the possibility of the Obama administration altering or doing away with the current “mark to market” accounting that is required to be used by banks at the current time. Mark to market accounting is the act of updating bank’s balance sheets with the present value of their assets, not compared to when it was first purchased, as what is usually done. Doing away with this, would most likely be a big boost for banks as their balance sheets would hold up in value much greater than they do now.