Feb 19, 2009 6:58 pm US/Central
How Could Housing Rescue Plan Help Homeowners?
BLAINE, Minn. (WCCO) ―
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Many of the callers are wondering what's in the plan that will help lead them out of their financial troubles.
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It's now estimated that one of 10 mortgages in the country is either in foreclosure or behind in the payments. But even homeowners not in trouble are curious what the Obama Administration's Housing Rescue Plan could do to help their sinking values.
A program in Anoka County that helps struggling homeowners started this year with one foreclosure counselor who worked part time. Now it has five, all working full time. And it's not just those facing foreclosure who want to know how the latest government stimulus is going to help.
There's a big red sign posted on the front door of a vacant home that sends chills through a neighborhood. That's because it's announcing that the property is in foreclosure and the property belongs to a bank. The mere presence of a foreclosed property is sure to drive down property values even further.
"It's important not to get too far behind because once you get too far behind then the programs just don't help you," said Patrick McFarland. He's the director of the Anoka County Community Action Program (ACCAP), a non-profit agency that offers counseling help to struggling homeowners
"Once that sheriff's sale happens, game over for most people," he said.
In just the past few days ACCAP's offices in Blaine have been swamped with phone calls. Mostly from homeowners seeking foreclosure counseling prompted by President Obama's Stimulus and Housing Rescue plans.
Many of the callers are wondering what's in the plan that will help lead them out of their financial troubles.
"This weekend we got about 87 calls on our hotline. After the president made his announcement, we had another 80 calls within an eight-hour period," McFarland said.
ACCAP's counseling sessions help troubled homeowners understand the maze of the foreclosure process. It offers them guidance to develop a workable family budget, which their lender will need to re-work the troubled loan.
Counselors say it's still unclear how those on the brink of foreclosure will be saved by the Obama plan, or how many who've lost the necessary home equity will be able to qualify for refinancing. Those details won't be released until March 4.
It's not just troubled mortgage holders who are wondering about the rescue plan.
At Bell Mortgage in Golden Valley, consultant Larry Kowalczyk said most homeowners who are not facing trouble shouldn't wait to refinance at today's low rates.
He said the money they are guaranteed to save by refinancing now could be lost if they wait for the president's plan to be fully explained.
"If they're in a situation where they might be at 100 percent financing, 95 percent of the value of home or maybe even upside down, their could potentially be some great benefits ... Unfortunately, we're not able to give you those answers to you yet," said Kowalczyk.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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