Orlando Real Estate News

Homeowner Affordability and Stability Plan Will NOT Help Orlando!

 This plan will NOT stop Orlando Real Estate Foreclosures!! It is aimed at people who want to lower their payment and may help distant future foreclosures from happening, but will do nothing to stem the tide we are currently facing.

 Let's read directly from the White Houses' summary:

 "Consider a family that took out a 30-year fixed rate mortgage of $207,000 with an interest rate of 6.50% on a house worth $260,000 at the time. Today, that family has about $200,000 remaining on their mortgage, but the value of that home has fallen 15 percent to $221,000 - making them ineligible for today's low interest rates that now generally require the borrower to have 20 percent home equity. Under this refinancing plan that family could refinance to a rate near 5.16% - reducing their annual payments by over $2,300."

 The Homeowner Affordability and Stability Plan is wonderful for Orlando people not facing job loss, or a sub prime loan. Basically this is a plan for people with steady income and good credit to reduce their payments and keep them out of foreclosure. Which is good for long term planning but touting this as a recovery program for homeowners currently in the thick of it is ridiculous. Anyone who bought in the peak of housing prices will more than likely not qualify since this program will only go up to 105% of a home's current value.

 It comes down to the numbers, anyone who purchased their home with 100% financing as most people in foreclosure did have no hope of qualifying without putting in a large amount of money in to reach these ratios. Since most homes lost at least 15% of value last year, and in California, Nevada, Arizona and Florida, the loss is closer to at least 30%.  This plan does nothing for these homeowners and yet is advertised as a partial solution to the housing crisis.

Instead of saving homeowners from foreclosure, the Homeowner Affordability and Stability Plan is set up to help people already able to make their payments and avoid foreclosure. This is simply a misrepresented plan to help people who don't really need help and has given hope to millions of people facing foreclosure without providing an actual solution for them.

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