The congress and the President have a new plan to help homeowners fight foreclosure. We refer to it as the “Obama Plan”. Many homeowners are wishing for the best, but if history has shown us anything, we know it’s always best to have a back up plan.

You’ll likely remember last years $320 Billion “Hope For Homeowners” program. This was the governments attempt to provide help then, which has been considered a huge disaster. The plan was supposed to provide funds to help homeowners refinance and the support was supposed to help banks provide new loans. The program was touted as the savior for borrowers who needed foreclosure help.

The end , according to Fox news, was a single saved home. That’s right…one single home. Don’t get me wrong, I am, sure that one person is very grateful, but $320 Billion to save one home? Is this what our tax dollars are used for!

My simple explanation for this is that congressmen know absolutely nothing about saving homes from foreclosure. In fact, I would be surprised if anyone who played a part in that bill ever helped a single person out of foreclosure, prior to that one home.

Now, the latest “Obama Plan” solution:

Obviously, after this history with the political “bailout plans” we didn’t have high hopes for this one either. And we’re not the only ones with low expectations; according to the Wall Street Journal headline article of April 15th 2009, GMAC mortgage now estimates that only ten percent of borrowers in trouble will be helped by the government plan. Did we just get scammed by the government out of another $320 billion dollars! What happened to the 4 million loans that were supposed to be helped, as claimed by the government? The Wall Street Journal is a pretty popular newspaper and GMAC is a huge lender, so I tend to take what they say pretty seriously, But wait, there’s more.

MSNBC talkshows last week decided to do their own undercover work and find out how helpful this new Obama plan would actually be. One of their commentators actually tried to find help under the new Obama Plan.

These where his unsuccessful and scary results:

1. In the majority of instances, he could not reach a loan servicer to provide any help at all, and

2. Where he did actually reach someone, none could explain if he would qualify for the Obama plan, or even provide much further assistance about finding out how to qualify.

3. Other charity companies were not any better.

It seems, as usual, no one really understands what’s going on and no one wants to make any changes to make it easier for families facing foreclosure.

When it comes right down to it, an experienced (for profit) company, operating legally, will have a significantly better chance of helping you with a loan modification when you are facing foreclosure. Lenders and not-for-profit companies simply don’t have the money, experience, or the employees to help the number of people facing foreclosure.

Another big part of the picture is incentive. What incentive does a charity have for helping save your home? They get paid regardless and they don’t get paid much, so they can’t afford to hire someone experienced enough to get the best modification for you. A for-profit company only gets paid on a successful workout plan, so they have a greater incentive to get you an affordable loan mod and to do it quickly.

As for the Obama plan; congratulations to the 10% who qualify, but most of America better start making plans to stop foreclosure yourself, or find a professional who can do it for you.

In the end, it’s not possible to think that one government plan can save every house in the USA. Foreclosures will never come with a one size fits all “government” solution. Each family needs to be saved individually and they almost never fit into a similar mold.

Like always, we recommend choosing three possible solutions to save your home. Never rely on one option and never, never, never, rely on the government to solve your problems, just feel happy and very lucky if you are part of that 10%!

By: Nick Adama

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Nick is the owner of the ForeclosurefishStop Foreclosure Blog, helps homeowners who are facing foreclosure and need help stopping foreclosure. (Published: May 2009 - Image: www.freedigitalphotos.net)