Home foreclosures will keep rising next year no matter who is elected president in November.Even the optimism that surrounds a new president taking office cannot resurrect home values overnight, and presidents have no direct ability to reduce rising mortgage rates. Nevertheless, Democrat Barack Obama and Republican John McCain both promise help for homeowners facing foreclosure.
Obama supports a broader role for government than does McCain. Both envision the Federal Housing Administration providing new, cheaper mortgages to distressed homeowners who otherwise would have difficulty refinancing into more secure government-insured loans with lower monthly payments.For the plans to work, lenders would have to be willing to take a substantial loss by reducing the amount owed on the loan. But some would have a powerful incentive to do so.
A refinancing deal could allow them to recover far more money than they would get from the costly process of foreclosing on the property and trying to resell it.
Obama supports legislation along these lines by Sen. Chris Dodd, D-Conn., that would help about 400,000 homeowners. People would not have to have good credit to qualify as long as they could show they can afford the new payments.
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Obama supports a broader role for government than does McCain. Both envision the Federal Housing Administration providing new, cheaper mortgages to distressed homeowners who otherwise would have difficulty refinancing into more secure government-insured loans with lower monthly payments.For the plans to work, lenders would have to be willing to take a substantial loss by reducing the amount owed on the loan. But some would have a powerful incentive to do so.
A refinancing deal could allow them to recover far more money than they would get from the costly process of foreclosing on the property and trying to resell it.
Obama supports legislation along these lines by Sen. Chris Dodd, D-Conn., that would help about 400,000 homeowners. People would not have to have good credit to qualify as long as they could show they can afford the new payments.
Read more Article...
