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Apr 21, 2009 5:34 pm US/Eastern
U.S. Sets Big Incentives To Head Off Foreclosures
MIAMI (CBS4) ―
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Mortgage bailout plans by the federal government hope to help 1 in 9 homeowners
CBS
The Obama Administration began the most ambitious effort since the 1930s to help troubled homeowners, offering lenders and borrowers big incentives and subsidies to try to stem the wave of foreclosures.
In the past, the federal Fannie Mae and Freddie Mac mortgage programs would only handle loans of up to 80% of your home's value, unless you bought mortgage insurance. And if you owed more than your home was worth, you were flat out of luck.
Through June 2010, borrowers whose loans are owned or guaranteed by
Fannie or Freddie may be able to get quick refinances for up to 105% of a home's value. They must be current on their mortgage payments, but administration officials estimate that as many as 5 million homeowners qualify. And refis are available for borrowers with credit scores as low as 620.
Robin Stout Magala of Freddie Mac said the Making Home Affordable program will allow mortgage processors to be paid directly by the feds under the new federal fund.
It's hoped the program will stabilize the nation's growing foreclosure problem with new loans becoming available over the next several weeks.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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