5 Proposals to Turn Around the Market

March 7, 2008 by azrealestate

Here are the five most prominent plans for propping up, rescuing, freezing, and throwing a lifeline to the housing market:

* Rep. Barney Frank: Give the Federal Housing Administration $15 billion to buy up loans and refinance them at lower rates, and give state and local governments $10 billion in grants to buy up foreclosed properties.

* Sen. Christopher Dodd: Create a new Federal Homeownership Preservation Corp., funded with up to $20 billion, to purchase distressed loans and help struggling home owners to refinance.

* Treasury Secretary Henry Paulson: Encourage the banking industry to freeze interest rates for five years for some borrowers, and give some home owners a 30-day reprieve from foreclosures.

* Senate Majority Leader Harry Reid and other democrats: Let bankruptcy judges reduce the obligations of borrowers unable to pay their mortgages, and spend $4 billion to buy and fix up foreclosed homes.

* Office of Thrift Supervision: Allow about 8 million home owners who owe more than their homes are worth to refinance into government-backed loans, giving lenders the ability to share some of the gains if the home is eventually sold at a higher price.

Source: The Associated Press, Alan Zibel (03/02/08)