Obama's Homeowner Assistance Plan-Will it Stop Foreclosures?

The Homeowner Affordability & Stability Plan was put into effect last year through the HFA. (Housing Financing Agency). It was done through the efforts of the Obama administration to try to slow down the foreclosure rate.
Its purpose is to assist homeowners who have been responsible in making mortgage payments.Those would be homeowners who having been making payments but might be facing some financial difficulties that could cause them to fall behind on the payments. (and ultimately wind up in the foreclosure pool). Homebuyers who willingly entered into mortgage contracts they knew would eventually be beyond their means would not be eligible for this assistance. Neither would the loan companies who gave the funds for these unqualified loans be eligible for assistance.
This bill gives financial institutions monetary incentives to participate in refinancing and reduced payments programs for the homeowners. Fannie Mae and Freddie Mac insured loans are included in the program.
Here is how it is supposed to work. Lenders would lower interest rates and mortgage payment amounts to no more than 31% of the household income. Also the maximum amount of the loans cannot be more than 105% of the current value of the home. Very few sub prime loans would be included in the program.
This year there was a new assistance program put into place that would target the hardest hit housing markets. In the first phase, states and areas that had housing price declines of 20% or more were targeted for assistance.
The second phase is directed towards regions with high concentrations of economically distressed neighborhoods. The areas in particular would be those with unemployment rates that exceeded 12% in 2009.
These programs ar in no way intended to instantly restore the housing market back to a normal state. Nor is it designed to help all homeowners that might be facing financial problems. It is basically a small step to slow down the increasing foreclosure rate.

For more on foreclosures visit:
http://foreclosure2sides.blogspot.com or http://whatforeclosure.info