President Obama announced his housing plan to avoid foreclosure of homeowners who are currently paying their mortgage but are not likely to be able to do so for long through little fault of their own. The program is also designed to stop foreclosure on homeowners who could afford a lower payment if they could get their mortgage refinanced at current market interest rates. The Obama housing plan is known as the Homeowner Affordability and Stability plan and is estimated to help 7 to 9 million people at a total cost of $275 billion.

Unlike current programs to prevent foreclosure, the Obama housing plan doesn’t require that the homeowner be behind on their payments to enter the program. And for homeowners qualifying under the foreclosure plan, the federal government also will make payments of up to $1,000 a year for five years toward the homeowner. That’s a $5,000 reduction in the principal of a mortgage for simply making your mortgage payment on time every month for the next five years!

Loyal readers may have noticed that I haven’t yet done my review of government and lender mortgage modification programs.  It’s not that I haven’t been thinking of issues related to foreclosures.  It’s simply that I’ve been too busy to sit down and put the work into the post that the topic deserves.  I hope to [...]