Obama & Arizona - proposed new plan to improve valley real estate conditions

As President Obama came to town on Wednesday an eager and subdued crowd awaited his plan to stabilize valley housing prices and pull us out of a continual downward slide of values.

The 3 main areas that were covered:

- a $75 billion homeowner stability initiative that could help 4 million at-risk borrowers.
Homeowners would have reduced payments in layers as a result of interest-rate reductions and government buy downs. Ideally the payments would get down to 31% of a borrower's income. If borrowers can manage this and stay current they could also qualify for $1,000 a year in government principal subsidies for five years.

- a refinancing push, opening this line to 5 million homeowners with Fannie Mae or Freddie Mac mortgages nationwide who cannot take advantage of low interest rates because their equity has dropped below or never reached the 20% mark. This would be an easy way to immediately lower payments to borrowers.

- through government investment, the position of Fannie & Freddie would strengthen. This would allow the firms to take on more mortgage debt. The plan also calls for more streamlined loan-modification guidelines for borrowers.

Should one of these proposals work, that could help stabilize home prices and provide a much-needed boost in the outlook many seem to hold of the current state of affairs in the real estate and mortgage markets.

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