Plan to stem home foreclosures

Several major banks are expanding their efforts to halt home foreclosures while the Obama administration develops its plan to help struggling homeowners.
The White House said President Barack Obama will outline his much-anticipated plan to spend at least $50 billion to prevent foreclosures.
Treasury Secretary Timothy Geithner announced a revised effort to stabilize the financial system on Monday. It contained outlines of a foreclosure-relief effort, however few details.
More than 2.3 million homeowners faced foreclosure proceedings last year, a 81 percent increase from 2007, and analysts say that number could soar as high as 10 million in the coming years, depending on the severity of the recession.
Obama's announcement is expected to include details about how the administration plans to spend at least $50 billion on foreclosure prevention and establish national standards for modifying home loans.

30-year-fixed drops to 5.25

The average rate on a 30-year fixed mortgage dropped to 5.25 percent this week. A year ago, the 30-year, fixed-rate mortgage averaged 5.72 percent. It's a great time to buy interest rates for 30-year fixed-rate mortgages are almost 1.5 percentage points below last year's peak set in late July, "offering many an incentive to buy or refinance.

Freddie Mac and sibling company Fannie Mae own or guarantee about half of the $11.5 trillion in U.S. outstanding home loan debt. The government seized control of the companies in September.

In late January, Freddie Mac reported that U.S. homeowners took out $17.5 billion in home equity in the fourth quarter by refinancing their mortgages, the lowest amount since the first quarter of 2001. If rates continue to go down we will start to see a shift...optimism is in the air.

House and Senate may meet in the middle. The House is proposing a $7,500 tax credit for first-time homebuyers under a certain income threshold. The Senate upped the ante last week, opting for a $15,000 tax credit available to all house hunters.

Home buyers looking for lower mortgage rates and borrowers struggling to keep their homes may soon receive help as Congress and the Obama administration yesterday moved closer to delivering a boost to the troubled real estate sector.

In separate actions yesterday, US Treasury Secretary Timothy Geithner disclosed a new financial industry bailout package that includes $50 billion to help refinance mortgages of homeowners at risk of foreclosure, and the US Senate passed an $838 billion economic stimulus bill that includes a $15,000 tax credit for home buyers.
Both measures drew praise from the real estate industry as necessary to stimulate home buying, mitigate foreclosures, and create jobs.