Thaindian News

By Madhuri Dey

Washington, Mar 28, (THAINDIAN NEWS) President Barack Obama declared recently that he would be pushing for a new plan that would be helping the underwater homeowners. Called the mortgage assistance program, the new plan will be catering to those homeowners who do not have any pending payments to be made, but are terribly short on cash, that is, almost completely broke. The plan is worth $14 billion. According to reports, the plan is aimed at making sure that those homeowners who are not yet broke and have no further mortgages to pay, but are about to go bankrupt, are able to get back on their feet.

The mortgage assistance program is not going to forestall all the foreclosures that had been scheduled to come into effect. However, it would be ceasing those foreclosures which are scheduled to come into effect from last year. The mortgage plan would be particularly helpful to those who are currently unemployed. It would also be helping those who had borrowed on unaffordable monthly interests, and are now finding it impossible to pay back. According to the new mortgage plan, principals which were very high would be lowered to a figure more affordable in such economically tight times.

Moreover, the mortgage plan is also going to provide financial assistance to those borrowers who are unemployed at present, ranging from three to six months. It would also provide incentives that would be useful in nullifying equity loans and second mortgages. However, despite all the good intentions, critics are skeptical of the program, claiming that the rules are too stringent and demonstration based, to be really effective in practice.