Having just signed the $787 billion stimulus package, President Obama is set today to unviel his plans to bailout homeowners. The official announcement is scheduled for Phoenix later in the day, but the White House blog already has some details up in the form of a Q&A. The bailout would apply to two different sets of homeowners. One group is up to date on their mortgage payments, but their house has declined in value to the point where the money owed on their mortgage is greater than the current value of their house. The other group is comprised of those who fell behind on their mortgage payments and are in danger of losing their homes.
Under the new proposal, called the Homeowner Affordability and Stability Plan, the Obama administration would help the first group by enabling them to refinance their home loans if their mortgages are part of securities owned by Fannie Mae and Freddie Mac. As for the group that is at risk of foreclosure, the Treasury Department would help by ” providing mortgage lenders with financial incentives to modify existing first mortgages.”