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Investors Await Details of Obama’s Foreclosure Prevention Plan

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By : John Cutts    99 or more times read
President Barack Obama is expected to release details of his $50 billion foreclosure prevention program, a day after he signed the $787 billion economic recovery bill.

The plan is expected to include measures to reduce the number of foreclosed homes and to create national standards for home loan modification.

The plan is part of the economic recovery bill which is expected to also include tax credit for first-time homebuyers to help the housing market recover from the foreclosure crisis.

Meanwhile, investors are wary over Obama’s foreclosure prevention plan following their disappointment over the vagueness of the financial bailout strategy announced by Department of Treasury Secretary Timothy Geithner.

Investors are expecting a comprehensive foreclosure mitigation program that will outline plans of the Obama Administration to help homeowners avoid losing their properties to foreclosures.

They are also interested to know how the administration will encourage mortgage lenders to modify loans that are in danger of defaulting.

For the meantime, the U.S. stock market is trying to recover from its drop to its lowest level for this year as a result of Geithner’s failure to provide details of the financial bailout strategy.

On the February 17, 2009 trading, Standard and Poor’s 500 closed with a 38-point loss or 4.6 percent to 789.

Nasdaq closed with a 64-point loss or 4.2 percent to 1,471 while the Dow Jones Industrial average dropped by 298 points, representing 3.8 percent loss to 7,553.

With the current trend in the stock market trading, it is evident that investors do not want to get their hopes up until they have heard details of Obama’s plans on how to prevent the flood of foreclosures and stabilize the housing market.

On the other hand, automobile manufacturers General Motors and Chrysler have submitted viability plans to the government. In its proposal, Chrysler has requested an additional loan of $2 billion from the government. This is in addition to the $4 billion received by the company and the pending $3 billion.

Included in Chrysler’s viability plan are additional job cuts of 3,000, production discontinuance for three vehicle models and overall reduction of production capacity.

According to Chrysler, there is progress in its negotiations with bondholders and the United Auto Workers Union.

Meanwhile, Obama’s foreclosure prevention plan is expected to include the Department of Commerce’s economic data about the housing sector, such as new building permits and housing starts and completions.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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