Homeowner Affordability & Stability Plan
In an effort to address the current housing crisis, President Obama held a press conference yesterday to promote his new Homeowner Affordability and Stability Plan (HASP). The National Association of Home Builders released a memo to the HBAs detailing some of the proposal's benefits to our industry, including:
- NAHB loan modification model and server/investor incentives
- Fannie Mae/Freddie Mac streamline refinance program to address current lack of PMI capacity
- Additional backing of Treasury and increased portfolio limits for Fannie Mae/Freddie Mac to bolster support for broader mortgage finance market
- Commitment of Fannie Mae/Freddie Mac to support state housing finance agencies
- Addressing current credit market dislocation
- Commitment to continue Treasury purchases of Fannie Mae/Freddie Mac MBS to lower mortgage rates to broaden the housing market
The HASP is in addition to the $8,000 tax credit already adopted in the national economic stimulus package signed into law earlier this week.
While the initial reports are encouraging, the HASP is an ambitious and complex plan that may find a cool reception from Congress. The plan itself leaves questions such as the possibility of future financial problems from Fannie Mae/Freddie Mac streamline refinances at elevated LTV.