Homeowner Affordability & Stability Plan

How It Affects Distressed Homeowners

in East Contra Costa County

… IMPORTANT INFORMATION FROM YOUR REALTORS®

SPENCER & EHLING Realtors®

925.250.0399 (JANICE) OR 925.381.3224 (CINDY)

www.JaniceSpencer.com Www.learn2ownit.com

Stimulus Package and Distressed Homeowners

Many distressed homeowners are asking how the newly signed Economic Stimulus Package will help them, and the answer is far from simple. For some, the “Homeowner Affordability and Stability Plan” may not make any difference at

all. To be sure, it has some attractive components to it, but the reality is that many of these components be have little to no effect for many who are facing loosing their home to foreclosure. Here’s a brief summary of the major Plan points. If you would like a copy of the complete Executive Summary of the plan, just e-mail me and put “Executive Summary” in the subject line of your e-mail.

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Article courtesy of Janice SpencerArticle courtesy of Janice Spencer

Plan Summary Short Version (Broker’s Opinion noted in italics)

Part One: Refinancing options for up to 4 to 5 Million Responsible Homeowners….

Refinancing a current loan historically requires the homeowner to have 80% equity in the home, and with the drops in prices, many homeowners can not meet this requirement. The Administration’s Plan will make refinance available to these homeowners (meeting particu-lar criteria). This part of the plan will most likely be available only to homeowners who are no more than 5% under water with their home’s value. Practically speaking, this means that

in East Contra Costa County, most troubled homeowners at risk of loosing their homes will

not be assisted at all by this part of the plan.

Part Two: $75 Billion Homeowner Stability Incentive to reach up to 3 to 4 Million At-Risk Homeowners…. This part of the plan focuses on offering incentives to lenders to modify the loans of borrowers who are struggling to afford their current payments and who can not sell because of the significant drop in home prices. It has two components that include incentives to the lenders and uniform guidelines for lenders to implement in the “modification” and “loss mitigation” processes. These guidelines have not yet been completed or published, but they are supposed to be available online as early as March 3rd. The jury is still out on this part of the plan. It looks good, but when you consider that lenders are already overwhelmed by requests for modifications and short sales, the

small incentives offered may do little to motivate them. And who will oversee

compliance with the new “guidelines” which will be optional for all but Freddie and

Fannie lenders?

Part Three: Support Low Mortgage Rates by Strengthening Confidence in Fannie Mae & Freddie

Mac…. Basically, this part of the plan has the Treasury Department buying up F&F mortgage-backed securities to promote stability and liquidity in the market place among other things. Sounds great, but how long can we afford to buy up these securities? What

happens when the gravy train runs dry?

Like all of you, this Broker is taking a “wait and see” position on just how well this plan

will actually bring substantive help to those who need it most.

For the most up to date information on help for distressed homeowners in East Contra

Costa County, please call us for a confidential complimentary consultation.

Janice Spencer 925.250.0399

Cindy Ehling 925.381.3224

Stimulus Plan and Distressed Homeowners continued…..

5119 Lone Tree Way, Antioch, CA 94531 www.janicespencer.com