By Dan Bewley and Terry Hood, The News On 6
TULSA, OK -- Homeowners and lenders across the country are still analyzing the president's mortgage relief plan. Critics say it's not enough, while supporters say it should help millions of people who are being forced from their homes.
Nearly 27% of homeowners across the country owe more on their mortgage than what their home is worth.
The new plan is meant to help them and, supporters say, will help revive the struggling housing market.
President Barack Obama's $75 billion mortgage relief plan is aimed at keeping close to 9 million U.S. homeowners from foreclosure.
While Oklahoma is far behind the leaders when it comes to the number of foreclosed homes, analysts say the president's new plan will help the Tulsa area.
"This legislation will help many Oklahomans who are facing foreclosure, good people who are just struggling to make their home payments," said bankruptcy attorney Dan Nunley, who has helped dozens of people manage through a foreclosed home.
The president's plan has several provisions.
One deals directly with Fannie Mae and Freddie Mac. It would remove restrictions that would allow the two lenders to refinance mortgages if more is owed on the home than it is worth.
Another provision would create incentives for lenders to modify subprime loans that are at risk of default or foreclosure.
The lenders must cut house payments to no more than 31 percent of the borrower's income.
The president says as many as 4 million homeowners could benefit.
But Nunley says another important part of the plan would allow judges to modify the mortgage. He says it would happen only if the homeowner files Chapter 13 bankruptcy.
"The judge would order an independent appraisal to determine what the true market value of the home is," Nunley said.
The appraisal would be conducted by a trustee representing the government, as well as attorneys for the homeowner and lender.
The judge's decision is based on the market value of the home and what the homeowner can afford to pay, not what they want to pay.
"So the debtor is not going to get away with anything that's either shady or get by with a sweetheart deal," Nunley said.
The lenders would voluntarily participate in the government programs.
The Treasury secretary says relief should be noticeable as soon as the rules are published in early March.