|
By CJP | February 18, 2009
 If your neighborhood looks less like Wisteria Lane and more like Under Water World, you are just the homeowner President Obama will be talking to later today when he unveils his plan to tow the underwater real estate market back to dry land.
Will it work? Who knows. But here’s what it is, and what it might mean for the distressed home-owning Janes out there:
- First of all, details are scarce. The latest fact sheet from the White House is HERE. and you’ll see the plan talks more about goals and principles, not about who exactly is eligible, nor what those people should do to get help.
- Generally, the plan will cost $75 billion for starters, and is designed to help up to 9 million people who fall into two groups- those who will get to refinance and those who will refinance AND have their house payments subsidized.
- For the first group, the plan calls on lenders to let underwater borrowers refinance their mortgages even if they owe more than 80% of their home’s value, which currently makes refinancing impossible.
- For the second group, a “Homeowner Stability Initiative” will spend $75 billion to subsidize lower monthly payments to bring them in line with a borrower’s income. It also will pay loan servicers $1,000 for every re-negotiated contract.
- A little more fine print:Â “Speculators and house flippers” need not apply; relocation money is available for renters forced to move if their landlord forecloses; some renegotiated rates expire after five years; and you know more fine print will surely come.
It all makes CJP miss the days when “good schools,” “hardwoods throughout,” and “location, location, location” were the buzz words in real estate.
| 
