White House Announces New Plan to Help Foreclosures...

We sort of a new plan, they're looking to get lenders to forgive loan balances and put a moratorium on foreclosures by using TARP money to fund the losses. Essentially it is a get out of jail free card for homeowners currently underwater and behind on payments.

It is structured as a mortgage program designed to reduce the amount owed while forgiving payments. Its focus, the unemployed and those that are upside down. The plan is to use TARP funds to fund 3 to 6 months of payments for these people. When they get their job back the money will have to be repaid.

It has decent face value, but the question is does this real deal with the real problem - unemployment. This is only postponing the inevitable and spending us further into debt. Although supporters argue because this is being funded by unused TARP funds it is not costing taxpayers anything.

The question remains, will the 15 to 50 billion dollar program really address and help the 1,000,000 people they claim it will. History has shown us programs like this in the past have fallen well short, and if this money is used to simply buy some time and is only delaying the inevitable could this money be spent (or not spent at all) in better ways.

It is an interesting move designed to help those unable to refinance due to the real estate market fall and the overall economy. Time will tell whether or not this is well spent money. Point in fact it is another bailout, becuase it is essentially giving funds to the banks to keep them operating a little while longer instead of subjecting them and homeowners to the real and hard truth of the matter.

Other questions remain, will homeowner's that participate have marks on their credit due to this program. If so, will it curb their borrowing ability in the future. How will this effect other markets dependent on credit, like the auto industry, furniture, construction, etc... is still under question. But we're here to talk about real estate and right now, this may afford some an opportunity. Let us all hope that it is not another overfunded underproductive program.