Times Of Change

The president had announced the new bailout plan last Wednesday about the $275 billion foreclosure prevention plan. With this, the administration is hoping that over 9 million homeowners will have the opportunity to modify their mortgages. This bailout plan will help the drowning real estate industry to control the increasing numbers of homeowners that are experiencing foreclosure.

This program is focused on mortgage modification and refinance. Lenders are preparing for the onslaught of borrowers looking for help. The program was first announced last 18th of Feb., which was targeting five million homeowners that would do refinance to lower their rates by 2010 that is, if their mortgages are from Freddie Mac or Fannie Mae.

Obama's plan is ambitious and it faces major implementation challenges that could be less effective than the administration officials hope. The plan was specifically designed to help borrowers refinance their mortgages with a reasonably priced payment. This would do if lenders and mortgage brokers would agree in lowering their payments, lessening their principals and other specific changes.

The treasury department have releases guiding principles to inform lenders on how to help homeowners avail of the program. However, the ambitious and multifaceted program could end up helping a fewer homeowners than the originally advertised due to strict eligible limitations and the delay of execution and legal challenges.