Will Obama’s Foreclosure Relief Plan Help Orlando Homeowners?

Written by admin on 20 February 2009

On Wednesday, February 18th, President Obama announced his 75-billion-dollar foreclosure relief plan during a visit to Mesa, Arizona. Major components of the plan include allowing Fannie Mae and Freddie Mac to provide refinancing at more than 80% loan-to-value and at reduced interest rates, offer incentives to lenders so they will work with borrowers on loan modifications, take action to keep mortgage rates low for middle-class home buyers, and support innovative reforms on bankruptcies, community grants and other potential solutions.

With 10-million home foreclosures anticipated nationwide over the next four years, help can’t come too soon. But will it be soon enough? An article by John Shoen, a Senior Producer for MSNBC.com says the problem is so huge, that President Obama’s relief plan will leave many eligible homeowners out in the cold.

A major stumbling block is the plan relies heavily on loan modifications. Loan modifications are a potential stumbling block since the decision on which homeowner to help and how much to help still rests with the individual mortgage holder. Even under similar circumstances, negotiations between a lender and a homeowner will vary from case to case and can result in different outcomes where one owner finds relief and the other is forced into foreclosure or a short sale.

Details of the plan won’t be made public until March 4, but lenders expect to be flooded with calls from Americans struggling to stay in their homes. Since, according to Goldman Sachs, the plan has funding to cover only about 8 percent of residential mortgage losses, millions of homeowners may be disappointed. Much of the success of this program depends on how private lenders and investors react and whether they are willing to allow service companies to act on their behalf. Mortgage servicing companies collect payments for the investor and find themselves caught in the middle. If they negotiate changes to the original terms so that the homeowner benefits, they may get sued by the investor for not performing as agreed. Unfortunately, this version of the foreclosure relief plan does not include protection from lawsuits for service companies. Lack of action by this lending group means more homeowners will have no choice but a short sale or foreclosure.

Orlando homeowners looking for a quick sale may not be able to wait for assistance from the foreclosure relief plan, especially since lenders may not respond positively with workable loan modifications. However, these owners may find some comfort in a Fannie Mae pilot project being tested in this Central Florida area. The project speeds up short sales by pre-approving properties and cutting out time normally required for back-and-forth negotiations.

If you’re a homeowner in the Orlando region who needs a quick sale, insist on working with a Realtor® experienced with short sale. It can be more difficult and time-consuming if you go it alone or work with an agent without a proven track record, so choose a Realtor® who understands the system and can help you navigate the choppy waters and negotiate your way out of your current situation.

Is A Short Sale Right for Your Situation? Find out today: If you live in Central Florida, contact The Orlando Property Group, your experienced short sales agents, specializing in real estate in Lake, Seminole, Orange, and Volusia Counties.

Seaching for a great real estate value in Central Florida? Need help with a short sale? Call or email me TODAY to go over your options!!!!!! Looking for specific information regarding Orlando Florida real estate prices and communities? Get Your Free Market Snapshot Read Also: Orlando Florida Relocation Resource Guide Read Also: Business 2.0 Magazine has named Orlando the number 1 hottest market with America’s best jobs. Read Also: Orlando Florida Facts & Resources Read Also: Orlando Florida City – Everything You Need To Know! If you are wanting to sell your Seminole County or Orlando area home in the next 6 to12 months, now is the time to begin putting your plan into place while time is still on your side. Please contact us for any real estate assistance you may need. We’re experts at putting people together with homes they love and can afford. Contact us today for information on Orlando and Seminole County real estate, Orlando & Seminole County homes for sale, Orlando & Seminole County relocation information, a free market analysis of your Orlando area or Seminole County home or statistics on homes in Orlando & Seminole County Florida or the surrounding Central Florida area, including Seminole County, Orange County, Lake County and Volusia County. We’re always available to answer your questions.