When I posted about passage of Obama's stimulus plan, I got a few comments from readers who were pretty much indifferent. A lot of government spending, a $400 tax break: the tone was that while it might help the broader economy, there's nothing in it for me personally.
So I'm wondering if your attitudes are the same after hearing about the $75 billion housing rescue plan that Obama announced yesterday. If you haven't heard the details by now (and if you haven't you died yesterday and woke back up this morning), Obama wants to help as many as 9 million homeowners by allowing those struggling with houses that are underwater refinance their loans. In English, that means if your house is worth less than you owe because of the drop in the housing market, you be able to get a new, lower-interest loan that reflects the actual value of the property.
You won't have to already be late on your mortgage to qualify, but your payment does need to be more than 31 percent of your income. (That's important because under old, sensible lending rules, banks never would have let you take a mortgage where the payment was more than a third of your income anyway.) One big question I have is whether that 31 percent limit will apply to your gross income or your take-home pay? That could make a big difference for many.
In any event, this seems like a stimulus plan that will help a lot more people directly, though it's unclear whether $75 billion is enough to help 9 million homeowners.