President-elect Barack Obama, in his first news conference last week, called on the Treasury and other government agencies to "use the substantial authority that they already have to help families avoid foreclosure and stay in their homes."
A move by Citigroup is the latest by major lenders to get their own houses in order by helping borrowers to keep theirs. Let me explain what this could mean to you:
Citibank has a new program out there for homeowners. They are proactively going out into communities right now contacting and offering homeowners' new more affordable loans
A lot of the banks getting money from the Federal Government are acting in good faith to put a little something back in the community. If you are a Citibank mortgage holder and have not been contacted, you might want to be proactive and call and inquire about this program.
Paulson has called the housing recovery central to the economy's revival and has urged Fannie Mae and Freddie Mac, who are now under government control, to play a bigger role.
Fannie Mae, Freddie Mac stands right in the center of the mortgage industry and have the ability to touch millions of lives. It's rumored that they are working "with deliberate speed" to establish a program to help homeowners avoid foreclosures by reduce their existing mortgage loans. Under the proposal, mortgage servicers will work with borrowers to reduce monthly payments to 38% percent of their income, a level considered a threshold for affordability, using a combination of lower principals, interest-rate reductions and extensions. That could make a very big difference for homeowners.
These are all things that are in the works. But what if you are in trouble today . . . and are worried about losing your home today. What should you do today???
Call your bank even if you've been turned down. A new program may be out there that can help you. There's new programs coming out every month; lenders are announcing something new trying to reach out and help people. You definitely want to talk to your Lender. You may also want to get some counseling help. People having trouble paying their mortgages are probably having trouble paying other bills. If your financial troubles are bigger than just your mortgage contact these entities:
California leads the nation in foreclosures and is one of the hardest hit by the housing-market collapse. California's Governor Schwarzenegger proposed a 90-day stay on home foreclosures in California last week.
Although these new programs may help some homeowners avoid foreclosure, it won't alleviate all of the strain in the housing market. But Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, and Bloomberg's most-accurate economic forecaster for 2008 says, "If housing doesn't get stabilized, it's really going to continue to bleed the economy.''
Let me hear your feedback, Do you agree?
