Mortgage Relief Plan

Today President Obama unveiled his Mortgage Relief Package. This is geared to fight off foreclosures and attempt to stop the mortgage crisis from deepening. This is long overdue for many Americans. Unfortunately it is too late for far too many who already succumbed to foreclosure. It will be interesting to see how the incentives actually will affect the servicers and investors who have been stubborn in the modification process. All of us here in Missouri are well aware of what is taking place across the Country, but we are pretty insulated from the horror stories going on in California and other parts of the Country. Imagine more than half of entire neighborhoods being vacant as a result of this mess. It is a reality for many and we can only hope this initiative will help.

The plan includes:

• Helping borrowers who owe more than 80% of their home's value to refinance and reduce their monthly payments.

• Creating a $75 billion homeowner stability initiative to reduce monthly payments for at-risk borrowers by subsidizing interest rates. The goal would be to bring payments to no more than 31% of a borrower's income.

• Providing multiple incentives to servicers to modify loans and to proactively help at-risk borrowers while they are still current in their payments.

• Creating a $10 billion fund to protect investors and servicers against further home price declines.

• Requiring all financial institutions receiving government funds to participate in a standardized loan modification program, while seeking to have all federal agencies that own or guarantee loans also apply the guidelines.

• Allowing judges to modify mortgages during bankruptcy, a measure the financial industry has strongly opposed.

• Providing more Treasury Department backing of Fannie Mae and Freddie Mac and expanding the number of mortgages the agencies back.

More details of this plan will be available as the day and week goes by, but you can view the whole story here or visit CNN Money.com.

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Flat Branch Mortgage, Inc.