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.