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.
So how can this help you in your problem to modify your loan? By helping to increase the liquidity of banks and help subsidize exisiting loans, this should help the banks become more cooperative in your loan modification. This will also be a big boost for home re-finances as well as the issuance of completely new loans all together. Most likely, the subsidation from the government will come with strings attached to the banks requiring them to be more cooperative in loan modification and other needs for financing. Click here to get your loan modified today!
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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.