Coalition Offers to Help Homebuyers
A coalition is offering special help to homeowners in danger of defaulting on their loan payments.
The Hope Now alliance is mailing out 300,000 letters, encouraging homeowners to search for information to avoid losing their homes.
The letter states, “Homeowners can easily find out about relief options that may include repayment plans, changes that can be made to the terms of a loan and other alternatives for which homeowners may be eligible.” The letter also advertises a toll-free hotline number: 1-888-995-HOPE.
The alliance represents a coalition of mortgage companies and non-profit housing counselors. It’s supported by the White House. Treasury Undersecretary Robert Steel expects the alliance to undertake additional home-saving measures in the near term.
Steel told the news media, “It is in no one’s interest to see a home go into foreclosure.”
Two million subprime mortgages will be reset at higher interest rates by the end of 2008. That means many homeowners will be faced with sharply higher monthly payments, increasing their risk of default.
Meanwhile, the head of the Federal Deposit Insurance Corporation has proposed a plan by which lenders would convert adjustable-rate mortgages to fixed-rate loans in order to keep monthly housing costs in check. Under the higher interest rates, monthly mortgage payments could balloon as much as $300 per month.
Without some additional aid, as many as two million homeowners could end up in default over the next year and the thought of using refinance as a way to raise funds have been obliterated by the credit crunch. The national housing crisis is not expected to end until the middle of 2008. In the meantime, sellers could be faced with plunging home prices while would-be buyers may find it difficult to obtain loans. Lenders have imposed stricter loan standards in an effort to help prevent foreclosures. So far, the housing crisis has not plunged the nation into a full-scale recession. However, some economists believe that such a scenario continues to be a possibility.
With the prices of food, clothing, oil, grocery on the up, I don’t think there is going to be much of a help to these home owners to save their houses. If the prices keep going up (and it’s more likely that they will), the situation is only going to become even worse!
June 22nd, 2008 at 4:38 pmThe panic in world financial markets has led to sharp falls in share prices and led to the contraction of credit markets. Oil prices have raised 91% in the last 12 months.
June 22nd, 2008 at 5:41 pm