Cartoon: Mortgage Industry

Cartoon: Foreclosures

Obama Home Foreclosure Plan

Mortgage modifications have a bad rap, yet President Obama is depending on them to stop the foreclosure crisis.

Modifications continue to be pushed as the best way to get struggling borrowers back on their feet. The jury is out on whether modifications work long-term. One recent study showed about half of borrowers with modified loans fell behind within six months.

Still, Obama is giving modifications a central role in his $75 billion foreclosure prevention program.

The program, which starts on Wednesday, calls for loan servicers to lower struggling borrowers' interest rates so that total payments are no more than 31% of their gross income. The government will subsidize part of the reduction, as well as kick in incentives for the servicers, borrowers and mortgage investors to participate in the modifications.

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My thoughts: Woo Pig Soooie!!! Here is some more taxpayer money for you.

Foreclosures Hit All Time High

More home owners than ever are losing the battle to make their monthly mortgage payments.

Over 900,000 households are in the foreclosure process, up 71% from a year ago, according to a survey by the Mortgage Bankers Association. That figure represents 2.04% of all mortgages, the highest rate in the report's quarterly, 36-year history.

Another 381,000 households, or 0.83% of borrowers, saw the foreclosure process started during the quarter, which was also a record.

Additionally, the number of mortgage borrowers who were over 30 days late on a payment in the last three months of 2007 is at its highest rate since 1985.

read the CNN story