PRESIDENT OBAMA’S NEW FORECLOSURE PREVENTION PLAN

Obviously, the true details of the foreclosure rescue plan are unknown, but here are some facts we do know.

First, President Barack Obama's plan is to tackle the foreclosure crisis by spending $50 to $75 billion in an effort to prevent up to 9 million Americans from losing their homes.

Second, the Government intended to increase their aid to Fannie Mae and Freddie Mac, including possibly absorbing up to $200 billion in losses for each company.

Third, and most importantly for consumers like you, the target of the new foreclosure rescue plan is aimed to aid borrowers who owe more on their mortgages than their homes are currently worth, and borrowers who are on the verge of foreclosure.

Now what does this all mean?

Let me break this down. This foreclosure rescue initiative intends to help approximately 5 million borrowers to refinance their home and provide incentive payments to mortgage lenders in an effort to help borrowers on the verge of foreclosure.

Therefore, in this new foreclosure rescue plan, the lenders are expected to cut monthly mortgage payments to sustainable levels which -- defined as no more than 31 percent of a homeowner’s income. However, it is worth cautioning that this plan will not be applicable to all homeowners and not all homeowner will qualify for this rescue plan.

Another key component: a new program aimed at helping homeowners said to be "under water" — with dwellings whose value have sunk below the principal still owing on their mortgages. Such mortgages have traditionally been almost impossible to refinance. But the White House said its program will help 4 to 5 million families do just that.

Current, nearly 13 million homeowners or nearly 27 percent, owe more on their mortgage than their house is now worth, according to Moody's Economy.com. Therefore, there is no quick fix to the current problem.

If you are currently in a mortgage that is creating stress, or that you owe more than your house is worth, or you are currently behind on your mortgages, you should contact the Law Offices of Steven P. Chang, a debt relief agency immediately at 801 s. Garfield Ave., Suite 338, Alhambra, CA 91801. (626) 281-1232.