Valley Reaction to Obama's Mortgage Relief Plan

February 18, 2009 10:06:48 PM PST
Maria and Miguel Garcia both lost their jobs recently. The mortgage on the Kerman home they share with their 3 sons ballooned making it impossible to keep up. Mrs. Garcia said, "When I came in I felt I was going to lose my house." They came to the Community Housing Council of Fresno, which offers free counseling, hoping to be among the 9 million homeowners promised help under the President's new housing plan. Mrs. Garcia said, "Yes, because we have 3 sons and we don't want to lose the house."

But Octavio Amezcua, a volunteer specialist at CHC, doesn't think they're eligible for help under the new plan which only applies to those with loans owned or guaranteed by Fannie Mae or Freddie Mac. He said, "We're talking about millions of people have different loans with different institutions and Fannie Mae and Freddie Mac are just 2 of them."

Amezcua says the Garcia's bank is willing to work with them though, to avoid foreclosure. President Obama's aid package will subsidize mortgages so that lenders can reduce mortgage payments that will equal about 31% of the homeowner's gross income.

Randall Guerra CHC's Director said, "The gist of it is to across the board reduce the debt for all these borrowers so they're paying for actually what the house is worth."

Lenders will be enticed with $1,000 for each mortgage they modify and even more money if the homeowner stays current. Guerra said President Obama's stimulus plan differs from President Bush's in that it includes lenders. "Unfortunately they didn't bring on board any of the banks and lenders and servicers that were willing to participate in that so nationally it was a dismal failure."

Guerra believes the president's strategy is a good start but what may hurt valley homeowners in getting help is that so many are losing the jobs that pay their mortgages.

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