Obama's $75B Housing Plan to Assist 3-4 Million Homeowners

The Obama administration unveiled a $75 billion housing plan on Wednesday, which it says will help seven to nine million American families avoid foreclosure.

In a White House press release, the Obama administration said the mortgage plan will boost confidence by creating lower mortgage rates and will allow refinancing for four to five million homeowners and assist another three to four million "hard pressed" homeowners.

As part of the plan, the U.S. Treasury will increase its stock purchases of Fannie and Freddie by up to $400 billion, or $200 billion each - double the original level. The Treasury will also boost its purchase of Fannie and Freddie's mortgage portfolios by $50 million each to $900 billion.

The administration said the move will strengthen confidence in Fannie Mae and Freddie Mac, and will ensure mortgage stability.

The $75 billion initiative will be available only to owner-occupied homes and aims to modify loans to reduce payments to more affordable levels, the administration added.

By Stephen Huebl and edited by Sarah Sussman
©CEP News Ltd. 2009