obama

President Obama has come up with a new plan to help homeowners who do not qualify for the rescue plan announced earlier this year. This plan will enable an owner to sell his property whose value is less than what his mortgage is worth. He can also transfer the ownership to the person who has lent the money. Foreclosures for sale will not happen in such a case.

Experts, however, find the measure lacking in details and said these are additional steps to help the housing market recover from the terrible blow. They observe that the real estate market will not recover unless lenders reduce the principal on home loans.

Research suggests that nearly 75 per cent of residents who bought homes owe more than what their houses are worth. South Florida is one area which leads in foreclosures. The crash in house prices have pushed the residents so deep into the muck that they will not benefit from the rescue plan. This plan stimulates refinancing by urging lenders to increase the loan-to-value proportion of mortgages to 105 per cent from 80 per cent.

Homeowners are now a frustrated lot. They are depressed because their home values are so less when compared to what they bought them for. Lenders, however, say that if banks reduce the principal on mortgages it would be difficult for people to get loans in the future. The lenders will be at risk. Alex Sanchez, head of the Florida Bankers Association.says the new plan will encourage both borrowers and lenders to pursue short sales. Property can also be transferred easily to lenders and foreclosures will come down.

In case of foreclosures, the credit score of borrowers takes a hit and they are not able to avail of loans. On the other hand, property transfers are less damaging to borrowers. Treasury Secretary Timothy Geithner said a quick sale will not do much of a financial damage and also protect the owners’ financial future.

While the government tries hard to revive the housing industry, foreclosures have become quite common in the US. In fact, this is a major problem in South Florida. In this state, Broward County noted the state’s third highest rate. In Palm Beach, the number of foreclosures increased by 44 per cent in a year. Since Obama announced his rescue plan, lenders have made 55,000 offers to modify loans. But the number of distressed homeowners is still large.

Search Foreclosed Houses in Florida by Top Counties

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