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by: marciafreeman
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President Obama was in Fort Myers, Florida the second week of February to promote the new economic stimulus bill. Fort Myers is one of the areas of the country hardest hit by the real estate crash. It is, however, only one of the areas dealing with the fallout from the real estate downturn. The rate of foreclosures on mortgage loans are the highest this country has ever seen. Many people were lured into purchasing more than they could afford during the real estate boom, as almost anyone who wanted credit could get it. Plenty of people, however, obtained reasonable mortgage loans they could afford and are now suffering from a drop in values and the unsteady economic times. The Obama Administration has made it clear that a big part of its new economic stimulus bill will go toward boosting the housing sector.
The specific points of that plan have yet to be made public, but the administration has vowed to focus on helping both homeowners with mortgage loans and lenders through this crisis. Secretary of Treasury, Timothy Geithner, told the Senate Banking Committee that any plan to address the struggling real estate market will center around bringing down monthly payments on mortgage loans. It has long been said that it is more financially beneficial for lending institutions to restructure mortgage loans than to have them go into foreclosure. Lawmakers, lenders and representatives from the housing sector have been brainstorming solutions that might help to decrease foreclosures and delinquencies. Lowering rates for mortgage loans and postponing the principal to the end of the term on loans are some of the suggestions to come out of the meetings. These tactics are all aimed at lowering the monthly payments for consumers whose incomes do not support their current mortgage loans. The President would like to support troubled homeowners before they foreclose on their mortgage loans.
President Obama is expected to announce the details of the plan to boost the ailing housing sector next week in Phoenix, Arizona. Arizona, like Florida, is one of the states hardest hit by declining home values and increasing foreclosure rates. Wall Street, economic analysts and consumers appear to be holding their breath as they await the particulars of the plan to reduce foreclosure rates on mortgage loans and boost the real estate sector. Many banks have, in fact, decided to shelve foreclosures until the beginning of March, as they too wait to hear how the stimulus plan will affect their business.
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