The recent recession and the consequent unemployment scenario have made it very difficult for millions of Americans to keep up with their mortgage payments. Most people have fallen back on their schedule of mortgage payments and are living in constant fear of losing their homes through foreclosures. The Obama administration has realized this predicament of the American people and has come out with effective measures, such as Government mortgage reduction program 2010 and Mortgage Reduction 2010 so that countless Americans do not become homeless.

Basic Concept Of Mortgage Reduction 2010

The basic thrust of the government mortgage reduction program is through the pumping in of $75 billion by the Congress to give incentives to banks to encourage them to help Americans retain their residences. Through the Mortgage Reduction 2010 plan, the mortgage payments of people who are living in constant fear of foreclosure are being restructured so that they are able to make these payments easily every month. The government mortgage reduction has been designed in such a way that a homeowner will not have to pay more than 38 percent of his or her income so that he can have enough balance money to pay his other bills and have enough for food and other essential requirements. This Mortgage Reduction 2010 plan will be valid for up to five years.

Homeowner Affordable Modification Program (HAMP)

This is a sub-component of President Obama's Homeowner Affordability and Stability Plan (HASP), which is a loss mitigation tool in order to assess the real estate industry's efforts to stem foreclosures and keep borrowers in their homes. This Mortgage Reduction 2010 program is meant to help the people retain their self-occupied home if it is facing foreclosure. The different qualifications for being entitled to the benefits of this program are: you should have defaulted on your mortgage payments and you should be facing foreclosure; the mortgage should have been taken out on or before January 1, 2009; the outstanding principal amount should be worth $729,750; and the outstanding amount should not exceed 125 percent of the total home value. You would also have to prove that you are facing real hardship, which is forcing you to default on your payments. By participating in this program you can reduce your mortgage payment by up to 50 percent and it will not be more than 38 percent of your monthly income.

This can be done either by reducing the interest rate which cannot go below two percent or by reducing the principal or by extending the term of the loan. The lenders will also get incentives in the form of an upfront fee of $1000 for every accepted application and $1000 annually for three years if the borrower pays regularly.

Fresh Initiatives By The Government

Stressed homeowners have been given fresh incentives by the government by re-financing their mortgages into fresh new government-backed mortgage loans with reduced payments. Under this Mortgage Reduction 2010 plan, borrowers who are unemployed or are looking for work will have to pay lesser payments for some time.

However, the fresh initiatives for Mortgage Reduction 2010 might not go down very well with those who are making regular payments and are not struggling to do so. The government has stressed that no new taxpayer cash will be used for these initiatives. New programs for helping responsible homeowners who are struggling to keep away from foreclosures are also in the offing.