Reports and investigations have attributed the current wave of global economic crisis to the sudden collapse of the finance market due to subprime mortgages. In short, bad loans and investments have started to catch up with the market. But this explanation is too simplistic, for various economic factors are actually at play. It's just that the bad loans have accumulated over the years and have slowly risen up the economic structure.
Recession recovery programs have therefore sprouted, aiming to help homeowners get up from the downturn in the economic cycle. The government has stepped in through stimulus packages, marking probably the first of many interventions of the state to the private sphere.
- Federal Deposit Insurance Corporation's Loan Modification Plan. FDIC's program services borrowers from failed banks to renegotiate to lower-interest fixed rate loans in order to pay off their debts. The agency is currently targeting those who are already delinquent, and those who are already nearing foreclosure in order to save their properties. The program is designed to increase the value of distressed mortgages by extracting affordable and sustainable mortgage checks from borrowers. The program aids homeowners in achieving long-term sustainable mortgage payment for their houses.
- US Government's Homeowner Affordability and Stability Plan. This recovery program is just part of newly-elected US President Barack Obama's strategy for solving the global economic crisis. The Loan Modification Plan addresses the foreclosures in housing that have created a ripple effect in the economy, not only of the USA, but of the whole world as well. Basically this help is available to all who have stayed up on the payments of their current mortgages but have been unable to refinance to lower their interest rates because their homes have become undervalued. The US government is offering these homeowners an opportunity to refinance into a 30- or 15-year fixed rate loan. This program is already in full swing, helping homeowners reclaim their homes and finances since March 4, 2009.
- Housing and Economic Recovery Act. In 2008, former US President George W. Bush signed into law the Housing and Economic Recovery Act, which aims to help the public regain confidence in Fannie Mae and Freddie Mac, two of the pioneer mortgage and finance institutions in the United States. Basically, the Act authorizes the Federal Housing Administration to offer a $300 billion guarantee in new 30-year fixed rate mortgages for subprime borrowers if the write-down principal loan balances of lenders reach up to 90 percent of current appraisal value. The government's action is considered to be "the most sweeping government intervention in private financial markets in decades."
Interested borrowers can contact their local state officials in order to avail themselves of the aforementioned programs. You can also visit the websites of these programs to find out if you are eligible for the recovery grant. Remember that in times of need and despair, there are always government plans and platforms that can help you recover from the fall.