The Homeowner Affordability and Stability Plan is part of the President’s broad, comprehensive strategy to get the economy back on track. You can read the EXECUTIVE SUMMARY here.
Treasury will develop uniform guidance for loan modifications across the mortgage industry, working closely with the bank agencies and building on the FDIC’s pioneering work. The guidelines will be used for the Administration’s new foreclosure prevention plan. Moreover, all financial institutions receiving financial assistance under the plan will be required to implement loan modification plans consistent with Treasury guidance.
Plan will not help everyone especially not investors who do not live in their homes as primary residence, second mortgages, people with jumbo loans.
We’ll have to see as more details are unveiled to see how the plan will be implemented. President emphasized that the plan will also help those who were current in their payments and did not take risky loans by stabilizing their home values. If your neighbor’s home is helped out of foreclosure, your home value will stop going down and eventually stabilize. That’s the basic idea. Let’s hope it works.