Assignment #1 (post2)

President Obama released information Wednesday, February 18, on his proposed foreclosure prevention plan. The program places more than 75 billion dollars towards stopping a large cause of the economic crisis. The three main elements of the plan include a program to refinance 4 million to 5 million homeowners into cheaper mortgages, a 75 billion dollar program to keep 3 million to 4 million homeowners out of foreclosure, and doubling the government's commitment to Fannie Mae and Freddie Mac.

Many believe that the plan would be of great benefit to the Nation's flailing economy, but o thers are less optimistic. Because the plan is an optional program for companies there is no guarantee on whether or nor a homeowner will benefit. It does not include a plan for dealing with second mortgages of distraught homeowners. Other critics say that the plan is too costly and wonder if spending more than 75 billion dollars would hurt more than it would help. I am curious to know how much of this money would be coming from tax payers or other sources.

President Obama maintains that his plan aims to rescue families who have been responsible and played by the rules. I think that while the proposal sounds like it could help, I think it would be more beneficial if the program was made mandatory rather than optional. There are incentives for lenders of up to $1,000 for each loan modification and a $1,000-a-year reductions in princple balances of homeowners who stay current with their mortgages. It seems a little crooked to me that lenders should be rewarded for helping conusmers. The millions of homeowners on the brink of forecsloure are not the only ones who need this economy to improve. The incentive money could be put to better use if the plan were simply made mandatory.