It is predicted that about 4 million homeowners are likely to face foreclosure proceedings this year, up from approximately 2.2 million in 2008. In order to reduce this number, President Obama announced a new plan to help troubled homeowners modify second mortgages or piggyback loans. This was in addition to his $50 billion plan that is aimed to reduce home foreclosures.
Under the new plan, the Treasury Department will offer subsidies and cash incentives to home lenders who will reduce the monthly payments on second home mortgages or forgive those loans completely. This plan is a kind of pluging of the hole in the original plan which provided assistance to homeowners who had fallen behind in primary or first mortgage paments or were in danger of doing so.
