President Obama's Mortgage Relief Plan
President Obama recently announced his Mortgage Relief Plan as the latest attempt to alleviate the housing crisis. If the plan is passed by Congress, the initiative could potentially save 3.5 million homeowners money by allowing them to refinance at lower rates. The measure would allow refinancing of home loans guaranteed by Fannie Mae, Freddie Mac and private investors and would target the large population of those denied refinancing. Refinancing has generally been denied due to the lost value in homes and/or due to homeowner credit rating.
To be eligible under the plan, borrowers must possess a minimum credit score of 580 and the loan must be within limitations set by the Federal Housing Authority. The program is estimated to cost the government between $5 billion and $10 billion and the costs would be offset by fees levied on financial firms with more than $50 billion in assets. EisnerAmper will continue to monitor the status of this plan.