Real Estate Pro Articles

Geithnerís Credit Relief Plan Part of Repo Homes Prevention

[Valid RSS feed]  Category Rss Feed -
By : John Cutts    99 or more times read
The widespread credit crunch in the financial industry has affected most sectors in the country, especially the housing market which is suffering from the unabated increase in the number of repo homes.

To address the devastating and widespread impact of the credit crunch, U.S. Treasury Secretary Timothy F. Geithner has announced the Public-Private Investment Program. Experts hope that Geithnerís program would bring relief to the financial industry and distressed homeowners who are on the brink of losing their properties to foreclosures.

The credit relief plan called on taxpayers to help insurance companies, bankers and other players in the financial industry to sell their mortgage-related assets.

Experts hope that the program will influence lawmakers to shift their attention from corporate bonuses to other substantive issues, particularly the growing number of repo homes that are weakening assets that the U.S. government will acquire.

Under the program, the government and investors will form a partnership to purchase repo homes loans or securities.

However, the program works against homeowners who will shoulder 94 percent of the risk for the loan pools.

Furthermore, guarantees or loans will be provided by the government to investors who in turn, will negotiate payments for assets and absorb the initial losses in an effort to mitigate the expected cost to the federal government.

According to experts, the success of the program designed to stabilize the financial industry and control the spread of repo homes in the country, depends on the willingness of homeowners to accept the proposed prices.

Meanwhile, Geithner explained that the government does not have any intention to impose pay or bonuses limitations on its partners. However, experts believed that investors are skeptical over Geithnerís program and whether it would success on reducing the number of repo homes.

They said that investors have every right to doubt following efforts of the Congress to enforce unreasonable taxes on bonuses and compensation paid by financial companies, such as American International Group.

Experts pointed out that it would be for the benefit of taxpayers if the Congress intensifies its efforts to help mortgage lenders prevent the spread of repo homes.

They believed that lawmakers can help a lot in foreclosure prevention by encouraging loan modifications that allow distressed borrowers to remain in their homes.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

Related Articles

Print This Article
Add To Favorites




© All rights reserved to Real Estate Pro Articles