Will Obama Save the Housing Market with $75 Billion?

Here is a summary of the $75 billion homeowner aid plan:

  • Helping borrowers who owe more than 80% of their home’s value to refinance and reduce their monthly payments.
  • Creating a $75 billion homeowner stability initiative to reduce monthly payments for at-risk borrowers by subsidizing interest rates. The goal would be to bring payments to no more than 31% of a borrower’s income.
  • Providing multiple incentives to servicers to modify loans and to proactively help at-risk borrowers while they are still current in their payments.
  • Creating a $10 billion fund to protect investors and servicers against further home price declines.
  • Requiring all financial institutions receiving government funds to participate in a standardized loan modification program, while seeking to have all federal agencies that own or guarantee loans also apply the guidelines.
  • Allowing judges to modify mortgages during bankruptcy, a measure the financial industry has strongly opposed.
  • Providing more Treasury Department backing of Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) and expanding the number of mortgages the agencies back.
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15 Responses to “Will Obama Save the Housing Market with $75 Billion?”


  1. 1 Sherri Brown Econ 101 T/TH February 18, 2009 at 9:16 PM

    This plan that was passed will help our economy in so many ways so many people are losing their houses to foreclosures. Even my family is struggling with the economy crisis.Obamas new law will help people who still owe money on their houses and help lower the payments. Almost everyone in the united states does not own their house only if your really rich or it was left to you by family and it was paid off. This will allow people in our economy to be saved at least by keeping their homes and at least have some hope thru the recession.

  2. 2 Brandon February 19, 2009 at 8:49 PM

    While this money may help people who are in danger of defaulting on their mortgages due to the housing crisis, what about all the people who have already lost their homes? What’s in it for them, if anything? Also, how is this going to help people who have lost all the equity in their homes because their monthly mortgage payment exceeds or almost exceeds their homes current value? It seems that without a positive fluctuation in home values this money will only cover parts of the overall problem…

  3. 3 Brandon Ruegsegger Macro ECON (M,W,F) February 19, 2009 at 8:52 PM

    While this money may help people who are in danger of defaulting on their mortgages due to the housing crisis, what about all the people who have already lost their homes? What’s in it for them, if anything? Also, how is this going to help people who have lost all the equity in their homes because their monthly mortgage payment exceeds or almost exceeds their homes current value? It seems that without a positive fluctuation in home values this money will only cover parts of the overall problem…

  4. 4 Jhovany G. Prin.Macro.(M,W,F) February 20, 2009 at 11:19 AM

    This plan is good for those who are struggling to make their monthly mortgage payments. However, like Brandon (above) said, what about those who already lost their homes? Also, what about those who are currently struggling and in danger of losing their homes?If unemployment continues to rise and salaries are cut, even with this housing market plan, some citizens will still lose their homes or struggle even more to make payments. I think the number one priority should be to secure that unemployment does not continue to rise.

  5. 5 Arnulfo Solorio February 22, 2009 at 7:21 PM

    Hi all, the situation is hard to understand. there are many questions out there and not that many answers. I think the choices the president has made are good. He is trying hard to move the economy forward as much as he can. I do not know what would happen to those individuals who already lost their homes. I wonder if they go back to their lender and get information about picking up the house again and get the help from the government would do it. I think this idea about lenders or banks lending only 31% of what you make would make more sense and be able to make the payment easier. This will force individuals to only buy what they can afford. It is going to be a chalenge to distribute this 75 billion without someone not taking advantage of the situation. What happened to the first 3 billion that Bush gave? Din’t they go to the wall street instead of the main street?

  6. 6 Annmarie Minite February 23, 2009 at 10:02 AM

    This package ONLY helps the people with foreclosers. Obama doesn’t see that there are two other categroies. 1. people barely making ends me to just barely pay their mortages and 2. people paying their mortages but not having much money left for other life needs. I am not 100% sure this package will be succesful.

  7. 7 LK Economics February 23, 2009 at 6:36 PM

    The housing market is a disaster. When so many people are losing their homes something has to be done. Looking back at all the crisis surrounding why people lost their homes. It was bad financing deals brought on by the creative lenders. With the new stimulus that Obama has approved it looks like it is directed in the right direction to rebuild homeowner stability.

  8. 8 Andrew Curry February 23, 2009 at 9:55 PM

    I agree with a post that was posted a couple before me. i know that this will help people who are struggling with their mortgages and are unable to make the payments. But what about the people that are paying their mortgages and dont have enough moeny to put food on the table to feed their family? Should they jsut stop paying their payments? This bill needs to be offered to help a wider range of people who are struggling in this economy.

  9. 9 quiche February 24, 2009 at 5:40 PM

    People who didn’t pay for their mortgage would have a greater benefit to this 75 billion stimulus plan. However, how about the continuing payers of mortgages which some of them increased in the past year. The real estate market has been overtaken by sellers, banks, and investors which created this housing crisis. People bought houses that they couldn’t afford..note: don’t buy something you cant afford. Overall, this will help people that dwells on the market value and owes mortgage payments. Hopefully, somehow this 75 billion will help each individual even if it means it helps with a single payment.

  10. 10 Dionico arechiga February 26, 2009 at 8:13 AM

    I think this plan is good for those people out there that did the math when they were buying a house. Those who already lost their homes probably didn’t do the math and now can’t do anything because they probably didn’t make enough money to start with and lost their houses sooner then those that could somewhat afforded it and now need help.

  11. 11 Houck24 March 15, 2009 at 4:23 PM

    I think that this plan would help the millions of people out there trying to keep their homes. Rebounding from the foreclosure problems and getting people back on their feet would be extremely beneficial in getting the economy back on track. Not only is it important to save the millions of people who are in jeopardy of losing there home, but incentives to buying homes right now would also help stimulate the economy and the housing market.

  12. 12 Gilberto Vazquez March 18, 2009 at 10:04 PM

    what happens to the people that have already lost their homes? will they just be forgotten or will something be done about that? it seems you need to lose ur house at the right time to get help.

  13. 13 Kelsey Ryan May 6, 2009 at 11:08 AM

    I really hope this plan will help the housing market. I especially hope that this will have a positive impact on my dad. He is going through a very hard financial time with this crisis. I really would like to see his house building company to pick up.

  14. 14 Britany Linton May 19, 2009 at 4:04 PM

    I like Obama’s plan and I personally think we are already starting to see results in the housing market. It is one of the first hard hit markets to start recovering so he must be doing something right.I’m glad things are starting to look up and I hope they continue to get better.

  15. 15 TTS06 December 17, 2009 at 12:52 PM

    The only people this plan should help is first time buyers and people owning one house. For all the people investing in housing who took bad loans and tried to gamble they knew this was a possibility and now they’re asking for a hand out.


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