President Obama Lays Out New Plan to Help Struggling Homeowners - 8 News NOW

President Obama Lays Out New Plan to Help Struggling Homeowners

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LAS VEGAS --  President Obama laid out a plan Wednesday to help underwater homeowners. But the help may be too little to help a majority of Nevadans.

The federal plan could save a homeowner thousands of dollars a year if they didn't buy their home during the housing peak. But many Las Vegas homeowners who've seen housing values cut in half, will not be eligible for the help.

The majority of homeowners who have private lenders have loans secured by either Fannie Mae or Freddie Mac. The president's idea is to make them eligible to refinance their home at a 30-year, 4 1/4 percent rate. It's a program previously eligible only to those who had direct government loans.

The White House estimates it would save the average eligible homeowner $3,000 a year. However, deeply underwater Nevadans will have to hope Congress requires lending banks to write down home values.

 

"Lenders are doing their part. Those that made these loans ought to take responsibility to make sure that they're taking cost-effective steps to make sure that those homeowners can stay in their homes. Part of doing that means that they should be writing down the principal on those loans," HUD Secretary Shaun Donovan said.

Here is a Fact Sheet on President Obama's Plan

Clark County's average home value is down half since the 2008 peak. The president's plan faces two obstacles in order to help Nevadans considered deeply underwater. It needs to pass the Republican controlled House of Representatives. In addition, Congress would need to write a law that compels private lending banks to lower home values.

To find out if you are eligible for the plan -- take the amount your home is worth today and multiply it by 1.4. If that number is short of what you owe, then you are not eligible.

 

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