Real Estate Investors to get Foreclosure Aid from Obama
Written by Emil Fleysher | March 15, 2012 | Foreclosure
The Obama administration will extend mortgage assistance for the first time to investors who bought multiple homes before the market imploded. Landlords can qualify for up to four federally-subsidized loan workouts starting around May, as long as they rent out each house or have plans to fill them. This will be done under HAMP and it will pay banks to reduce monthly payments by cutting interest rates, stretching terms, and forgiving principal.
The Obama administration announced last month that it would triple incentives to owners of mortgages that reduce home-loan debt and expand eligibility to borrowers struggling with other liabilities. The program extension will apply to all loans, including those held by Fannie Mae and Freddie Mac. This should make about 700,000 landlords eligible under the revisions to HAMP.
The government’s need to protect neighborhoods from decay and renters from eviction by keeping the current owners in place is outweighing concern that taxpayers will end up bailing out real-estate investors. Vacant properties push down a neighborhood’s property values and keep the housing market from recovering. The government said that providing multiple property owners assistance and blanket modifications regardless of occupancy would be more efficient than restrictive programs. Critics of the revisions state that taxpayers should not come to the aid of individuals who took bets in the housing market and lost.
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