Democrat Barack Obama has proposed a 90-day moratorium on foreclosures to help the nation’s ailing economy.  In addition to a freeze on foreclosures, Obama has suggested a two-year tax break for businesses that create new jobs and to allow people to withdraw up to $10,000 from their retirement accounts without any penalty this year and next. 

“I’m proposing a number of steps that we should take immediately to stabilize our financial system, provide relief to families and communities and help struggling homeowners,” Obama told a crowd of 3,000. “It’s a plan that begins with one word that’s on everyone’s mind, and it’s spelled J-O-B-S.” 

Obama has also called for a $3,000 tax credit for each additional full-time job a business creates. That means a business that adds five jobs would get a $15,000 break.  The campaign has estimated that it would cost $40 billion and end after 2010.

What happens with a 90 day freeze on foreclosures?  Who will work the loan modifications, forebearances, etc..  Aren’t the lenders already doing this?  What happens after the 90 days if the paperwork is still caught up in the loss mitigation department or collections due to the lenders not having enough manpower?  It is always nice to propose plans, but where is the meat?  Tell the American people in detail how this can work.  Sure it gives struggling homeowners a bright spot in their day to know SOMEONE in Washington is trying to figure out a plan, but we’ve already had a number of programs created to include, the HOPE program and yeah, the $300 Billion Housing Rescue plan passed this pass
July.

What happened to the $300 Billion Dollar Rescue Plan?

The vote was 46-21 to advance the bill, which would permit the government to insure new, cheaper mortgages for hundreds of thousands of struggling homeowners now facing foreclosure.  “We look forward to put in place new authorities to improve confidence and stability in markets, and to provide better oversight for Fannie Mae and Freddie Mac,” said White House spokesman Tony Fratto. “The Federal Housing Administration will begin to implement new policies intended to keep more deserving American families in their homes.” 

The legislation is supposed to offer affordable government-back mortgages to homeowners at risk of foreclosure.  The FHA will be allowed to insure up to $300 billion in new 30-year fixed-rate mortgages for at-risk borrowers in owner-occupied homes if their lenders agree to write down loan balances to 90% of the homes’ current appraised value.

I’d like to know how this program is working.  Maybe we will get an update soon enough before another bailout bill is passed.

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