Loan Modification Plan Allows Many to Keep Their Homes

Eddie Morrison, a truck driver making $65,000 dollars a year, was behind on his mortgage and waiting for a foreclosure letter when he received a letter from their mortgage holder, IndyMac, that informed him that he would be able to keep his home.

The mortgage holder, which had recently be seized by federal regulators, and was now being headed by Federal Deposit Insurance Corporation Chairman Sheila Bair, put a hold on foreclosures. This freeze gave people such as Eddie Morrison the time to create an affordable loan payment plan. Bair based this plan on the idea that she thinks it is of the utmost importance to deal with the root of the economic problem by helping homeowners such as Morrison. 

Bair has proposed a plan that will "allow homeowners who are sixty days late on their mortgage a chance to reduce high interest rates and extend the length of the loan if they qualify". Some people in Washington believe that the proposal is really just a subsidy for troubled homeowners. However Bair was quoted as saying "we could prevent 1.5 million foreclosures from occurring".  She also believed that her plan could prevent thirty percent of the predicted foreclosures expected over the next two years. 

I hope that this plan is taken into consideration by politicians in Washington, because if her numbers are correct then the proposed plan could give some seriously needed stress relief to homeowners.