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VT Battling the Foreclosure Crisis

There may be help for the estimated four million homeowners facing foreclosure Friday. President Barack Obama unveiled a new program aimed at helping them make mortgage payments.

The major goal is to help those people to refinance their homes and greatly decrease their monthly payments.

Burlington real estate agent Dana Basiliere says the president's new plan is aimed at people who are, upside down in their mortgages.

"They owe more on their property than they can get for it," Basiliere said.

Basiliere says it's one of the leading reasons behind foreclosures, and one of the major problems the new mortgage relief program hopes to address. Vermont had about 1,700 foreclosures over the last two years.

"We've had over 1,200 people call, families call to talk about their foreclosures, potential foreclosures, or the foreclosure that's been filed against them," Vermont Department of Banking Deputy Commissioner Tom Candon said.

The new program is designed to help the long term unemployed, which often leads to people foreclosing on their homes.

Under the program banks and lenders are required to :

- Temporarily cut monthly mortgage payments for unemployed borrowers.

- Reduce those monthly payments to less than 31 percent of a borrower's income

- In some cases, lenders can temporarily suspend payments.

But some state leaders are skeptical about whether the program will really provide the help people need.

"The person still may have a car loan, student loans and other types of loans they have to pay down too," Candon said.

Lenders will also receive federal incentives to provide relief to unemployed homeowners. But the Obama administration says that money will not come from taxpayer money.

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