On Wednesday President Obama unveiled The Homeowner Stability Intitiative in Phoenix, a $275 billion, three-part plan to stop the soaring rate of mortgage foreclosures across the country - 2.3 million foreclosures last year.

His plan has three parts:

First, it provides low-cost refinancing for as many as five million homeowners who are not behind on their mortgage payments.  If a bank agrees to issue lower-interest loans to homeowners who are current on thier mortgages, the loans could be sold to Fannie Mae and Freddie Mac.

The second part of the plan makes another 200 billion available for mortgage refinance, providing a government subsidy to purchase mortgages from lenders.

The third part uses 75 billion in Wall Street rescue money to assist delinquent or at-risk borrowers in modifying their mortgages so that no more than 31 percent of their after-tax income is tied up in their home loans. 

 Critics argue that the President's plan doesn't compel lenders to modify troubled mortgages; instead, it provides incentives to lenders to modify loans ($1,000).  The plan also offers little help to homeowners whose loan exceeds their property value by more than 5%.

For more information, read the full article on RISMedia.com

For answers to some of the most common questions regarding the Homeowner Affordability and Stability Act, visit the White House Blog.

http://www.timtanzhomes.com