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At the beginning of February, President Obama unveiled a new plan to help distressed homeowners gain some relief (does not apply to investment properties). According to the plan, homeowners who have remained current on their mortgages will have the opportunity to refinance at much lower rates.
The new plan will help homeowners save an estimated $3,000 every year in form of repayments. The plan aims at helping homeowners avoid the risk of foreclosure while giving a boost to the floundering housing sector.
The market has hailed the plan with enthusiasm as experts believe it could go a long way towards lowering in the inflow of foreclosure properties and short sale homes on the seller’s block and lowering the inventory of existing foreclosed homes. This is essential for the recovery of the housing market, as conventional homes stand no chance against the lower priced foreclosure homes. This in turn has taken a heavy toll on prevailing market rates.
Announcement of this plan comes in the wake of a number of other attempts made by the current administration to rescue the floundering real estate market. While some are hopeful that this plan will help turn the tide, others are speculative of the reception it will receive in Congress as it is still needs approval from that body before it can go live.
I will continue to monitor the situation and will post updates here from time to time, so please check back often. In the meantime, if you need more detail, click here.