While Europe, arguably the most socially advanced region on earth, has abolished the death penalty, some states continue to employ this barbaric practice against only a relative handful of murderers. However, there are two trends that could hasten the elimination of the death penalty in the United States.

United States Census Bureau projections reveal that people of color, including White Hispanics, will be the numerical majority in the United States by 2042. A 2007 Pew Research Center report found that while 68% of Whites favored the death penalty, less than 50% of Asian and Pacific Islanders, Latinos, and Blacks favored the death penalty.

What will happen to the political will for executions when the balance of racial demographics tips in favor of people of color? Other factors may come into play over the coming decades that could provide impetus for the continuation of the death penalty. However, pro-death penalty advocates will be challenged to find comfort in the emerging demographic patterns. The current names associated with ethnic groups may well change over the coming decades as more individuals identify themselves as bi-racial. However, one thing is certain. Non-Whites and White Hispanics will continue to increase their political influence within the American electoral process, with Whites becoming a relatively shrinking minority.

Latinos, who are mostly Roman Catholic, are the largest minority group. The Catholic Church is opposed to the death penalty. Central and South America is largely a death penalty free zone. The prospect of Latinos favoring the death penalty is therefore unlikely. African-Americans, the second-largest minority group, are strongly opposed to the death penalty. The racial demographics therefore suggest declining support for the death penalty in America.

The 2008 election was a clear indicator of the diminishing influence of Whites in American society. President-elect Barak Obama was not the choice of White America. Indeed, he was strongly rejected by double digits by White voters 56% to 43%. (Source: New York Times Exit Polls). This was especially the case in the former slave states, such as Alabama, where 91% of White voters chose the Republican candidate John McCain. Yet he won by more than 8 million votes, compared to President Bush’s victory margin of 3 million votes in 2004.

Some analysts have suggested that the election of Barak Obama is an indicator that race is less of a factor in American politics. However, the election results fail to support this contention. Instead, changing racial demographics provide people of color with more electoral influence than in the past as their numbers continue to increase in American society.

In 2008, people of color, including white Hispanics, voted for the candidate of color, while non-Hispanic Whites voted for the White candidate. Obama received roughly 66% of the Asian vote, 65% of the Latino vote, and 95% of the Black vote. When whites become a numerical minority in the United States, it is likely, based on current trends, that support for the death penalty will diminish since people of color are less supportive of the practice.

A second factor in the possible termination of the death penalty is the election of Barak Obama. He is likely to nominate more progressive justices to the Supreme Court, thereby giving the anti-death penalty contingent on the bench a majority in the event a current conservative justice is to be replaced. Although President-elect Obama has called for an expansion of the death penalty to include child rapists, it is likely that he will appoint a progressive justice who may well disagree with him on the death penalty.

There is also the possibility that there will be pressure on President-elect Obama from within his Party to modify his position on the death penalty. A Supreme Court reversal of the recent 5-4 decision on the death penalty in less than 15 years is therefore another possible, but not certain, scenario for the elimination of the death penalty.

Most of us when we hear the term, social security, tend to think of the elderly, or get a brief pre-cognitive flash of the days ahead when we, too, will be “older” and consigned to alloting portions of our days filling prescriptions and playing bingo. And so we should. The U.S. social security program, drafted by the Roosevelt administration and passed by congress as the social security act of 1935, was originally known as the old age pension act.

Brought into existence at a time when the American people were still in the throes of the great depression, the social security act provided retirement benefits to elderly individuals who might otherwise have been forced to rely on the generosity and stability of their immediate and extended family members. It was, essentially, an expression of the belief that the country’s retirement-age workers should not be left to completely fend for themselves. It was, likewise, a reflection of our then-President, Franklin Delano Roosevelt, that the American nation was a single entity, bound in both sincerity as well as obligation, to deliver a minimal level of equity to all its citizens.

The social security act provided a safety net for the elderly. And, today, despite decades-long discussions of potential insolvency, it continues to provide this same net. However, it also does quite a bit more. Today, social security covers more than just retirement benefits for individual workers. It allows widows to receive benefits based on the earnings records of deceased spouses and provides survivors benefits for the minor children of deceased parents. And, last but not least, it provides disability benefits.

After the initial passage of the social security act of 1935, the act was later amended to include provisions for providing benefits to injured and sick workers, based on their disability status. Such benefits were covered under title II of the social security act. However, to provide equal and fair consideration to individuals whose condition was such that they were never able to work, or whose condition made it impossible to work long enough to become insured for title II benefits, title 16 benefits were also established. Today, typically, we simply refer to title II benefits as social security disability and title 16 benefits as SSI, or supplemental security income.

Chances are, if you are younger than thirty, you’ve never heard of either social security disability or ssi. However, if you’ve had a friend, acquaintance, or family relation who has become sick or injured and, as a consequence, unable to work, you may be at least a little familiar with the programs and associate them with the broader safety net operated by the social security administration.

The title II and title 16 disability programs administered by the federal government allow individuals who are unable to work the same dignity as retirement-age workers. However, unlike the federal government’s “old age pension”, qualifying for disability benefits requires more than simply calling the local social security office (for information on filing for disability benefits, this faq may be helpful: Answers to disability program questions.

To receive disability benefits, an individual’s medical condition must be evaluated to determine whether or not their condition is truly disabling, and also to determine whether or not their condition will last a minimal length of time. To this end, the social security administration has established a multi-component system to accomodate disability applicants.

How does this system work? In many respects, the system is overly complicated, but it essentially works as follows: an individual who cannnot or who can no longer work simply calls their local social security office, informing them of the desire to pursue disability benefits. Once this request has been made, an appointment is made for the purpose of conducting an interview and application. Once an application has been taken, it is sent to a a state-level agency that specializes in making decisions on such claims. At this agency, a person’s medical records will both be gathered and evaluated. And after the necessary analysis has been conducted, provided that a person meets the social security administration’s standards of eligibility, their claim will be approved and they can then look forward to receiving benefits.

Is the system always this cut and dry? Unfortunately, in many cases, it is not. And, considering how many bureaucratic institutions, including government programs, are run, this is not to be unexpected. Yet, despite this, the title II and title 16 sections of the social security act provide help and needed resources for literally millions of American citizens who are either unable to work or whose condition, starting from an early point in their life, made it quite impossible to ever seek work.

The EU reviewed the role of hedge funds and private equity in the financial crisis and drew some lessons regarding the need for EU level regulation of these fund types. The financial crisis had revealed that hedge funds could impact financial stability in ways that had not previously been expected. However, there is also widespread concern about the extent to which private equity portfolio companies are over-reliant on increasingly scarce bank debt, raising questions about their financial viability.

So there are those who say private equity did not cause the economic crisis which we are now experiencing, but we can all agree that the crisis most definitely is the result of excessive debt, and hedge funds and private equity are responsible for a very sizeable amount of recent debt.

There are growing concerns with the EU’s plan to put forward new regulations within the hedge fund industry as the changes could prove extensively costly to implement, even with the new rules being toned down by the member states.

In the current state of the new regulations a group of city lawyers said that the changes could lead to a systematic failure within the European markets if they were to be carried out. They could also create significant legal uncertainty, which would lead again to a potential systemic failure and widespread market disruption, unless they are appropriately amended.

Due to the possible chaotic effects that these new regulations could cause to the European economy, ministers are expected to intensify their lobbying efforts to head off what are widely seen as heavy-handed rules governing the behaviour of hedge funds, private equity firms and other alternative investment businesses. The City minister recently held talks with the Spanish government, which currently holds the EU presidency about his concern with hedge funds and private equity firms, of which many are based in London, will just simply relocate from the EU if the rules are implemented without reforms.

Maintaining a home can be a costly venture and most home owners don’t have loose cash sitting in a checking account to utilize for repairs and home improvements. So most American home owners tend to borrow to complete this venture.

But please be aware, there are things that your loan officer won’t tell you about that home repair loan that you are getting. So before you get a new mortgage loan to pay for major home fix-ups, ensure that you follow a specific guide to get money:

First make sure that you pay as little interest on this loan as possible, so make sure you shop around, YOU DON’T NEED TO REFINANCE YOUR MORTGAGE. You should also try to get a tax-deduction for what you do pay for this mortgage loan and don’t end up sacrificing your financial health and well being. Not doing this is the first step of placing yourself in the poor house.

Secondly ensure that you take into account all the variables when applying for that loan:

Where can you get the best financing?

How will the monthly payments affect your budget?

How much equity do you have in your home?

What is the nature of your home improvement project

How long it will take you to repay the debt?

These are key questions that should point you in the right direction. You must find the best loan option. But even then you must make sure that this does not cause your budget to collapse. If it does then you will be in serious problems with respect to the monthly payment. Having less than twenty percent (20%) of market value in equity in your home is a clear signal to wait. This means that in one felt swoop you can move from happy owner to foreclosed properties if the financial institution that you borrowed from goes belly up.

With respect to the nature of the project and the term life of the loan here are just a few questions you MUST ask yourself before taking on that loan.

1. How much does the home repair project cost? To calculate this you use the contractors bid amount and subsequently add 10% to 20% for potential cost overruns.

2. Will you be able to afford this? If you cannot easily afford the monthly payments on the loan, you are ‘courting trouble’ by even thinking about a home equity loan or credit line. As mentioned earlier but if you have less than 20% equity value in your home you will be forced to pay higher interest rates and you won’t have any backup for emergencies.

3. Examine your other financial obligations? Your financial bases should be covered i.e you should be saving enough cash for retirement, to clear all existing credit card debt and at least ninety days living expenses saved in an emergency fund.

4. Finally will the project add value to your home? Some home repairs just don’t add enough value, especially maintenance repairs. Many American home improvements add some monetary value, and normally you will not recover 50% to 75% of what you spend in added value. So the less value you’re adding to your property the longer you should consider waiting until you can pay cash, instead of taking a home repair loan.

Mortgage refinancing can make good sense if you want to make improvements on the house, pay those college fees, or pay-down higher-interest loans. As property prices have gone up and up, homeowners often find they have more equity than they ever dreamed of when they first bought. Richard Syron, CEO and Chairman of the Federal Home Loan Mortgage Corporation — or ‘Freddie Mac’ — says “more than a dozen years of sustained growth in housing prices have turned many middle class homeowners into millionaires; put countless children through college; and made the family home the most valuable egg in the American nest”. Maybe we can’t all be millionaires but, even so, “for the typical family, home equity accounts for the bulk of their wealth,” agrees Frank Nothaft, chief economist at Freddie Mac.

It all looks good, so far. But now that you’ve started to look for that home equity loan — most likely a fixed-term second mortgage, or a line of credit — maybe you’re starting to wonder why home equity rates are generally higher than all those great first mortgage packages?

There are quite a few reasons. For a start, you’re comparing apples and oranges –they’re different breeds of loan, and the interest rates reflect the different features offered by each. But how, exactly, are those interest rates set? Frank Nothaft explains that “home equity loans are typically linked to the prime rate … many home equity loans have rates that are 1 percent or more above the prime rate” and, by comparison, “most 30-year first mortgages are typically below prime”. The interest rate for a typical home equity loan needs to take several factors into account: the risks to the lender, the duration of the loan, the flexibility offered to the borrower, and the amount of the loan in relation to the amount of equity available (referred to as the Loan to Value (LTV).

The first mortgage, of whatever kind, is just that — it’s the first lien on your property, and the first in line if you default on your loans. When you got your first mortgage you put your home up as collateral against the loan. If you can’t make the payments, the mortgage company can proceed with a collection action — in a worst-case scenario, you lose the house to pay off the loan. And, because it’s the primary loan, your first mortgage has priority in any collection action. Essentially, the mortgage company is confident that they’ll get their money back if you default. For a second mortgage, the situation’s different: whether it’s a conventional repayment mortgage or a line of credit (or any other kind of loan), it’s second in line if things go wrong. So that’s a bit more of a risk to the mortgage company, particularly if the value of your house depreciates, or you take out yet more loans.

And then there’s the time factor. The term, or duration, of a home equity loan is usually far less than that of a first mortgage. Most first mortgages are for a period of maybe 15, 20, or even 30 years. That’s because most people want to minimize their mortgage payments as much as possible, especially at the outset, and they’re in it for the long-haul. And, just think about it: while you’re making the payments, you’re paying interest, and you’re making the mortgage company money. You’re a good bet. That’s why, when it comes to first mortgages, companies compete with each other so aggressively to get your custom. And they pass that competition on to you, through lower interest rates.

A standard home equity loan is effectively a second mortgage, and can be a fixed or adjustable rate mortgage. The money is loaned in one lump sum, and payments are made over a pre-arranged duration — just like a first mortgage. But a home equity loan is typically for a short term, possibly only for a few years. Usually it’s for a specific purpose — home improvements, or paying of a debt — and the higher interest rate means most people prefer to pay it off as soon as they can, rather than mount up large amounts of interest. The mortgage company doesn’t have your custom for the long-haul, and it takes this into account when setting the interest rate.

Even so, this kind of mortgage can be far cheaper than the interest rates on credit cards or unsecured loans. As interest rates rise, pushed up by the Federal Reserve’s successive increases in the prime or ‘index’ rate, more and more borrowers are seeing the value of fixed-rate home equity options, in the 10-15 year range. Although these still have higher interest rates than first mortgages, homeowners have the best of both worlds: the comfort of knowing the rate won’t rise, and the ability to improve their quality of life by releasing the equity in their home.

With the other kind of home equity loan, the line of credit, you can draw cash whenever you want, up to your limit. When you pay money back, that credit is released again for you to use, immediately. In that sense it’s an “open account”, a bit like having a credit card, but with lower interest rates. This freedom to dip in and out of the loan can be a boon for the homeowner, who only pays interest on the amount owed, and nothing more — but it is more unpredictable, and less lucrative, for the mortgage company. So you pay that bit more for the flexibility of being able to use the loan as you wish, and that comes in the form of a higher interest rate.

But, given the ability to release your equity and use your wealth when and where you want, it can certainly pay to refinance. Don Taylor, of Bankrate.com, agrees, saying that a home equity loan, or a home equity line of credit (HELOC) can “allow you to restructure your debts or finance something that’s important to you,” and adds that both kinds of loan typically have much lower closing costs than a first mortgage.

Like many large banks on wall street Goldman Sachs offers several hedge funds. A few of these took big losses this summer and in one case with the Goldman Global Opportunities Fund the firm had to inject $3B into the fund to keep it running ($2B of their own money). “Given the market dislocation, the performance of GEO has suffered significantly,” Goldman said. “Our response has been to reduce risk and leverage.” In other words their losses mostly came from using too much leverage in the first place.

“Many funds employing quantitative strategies are currently under pressure as recent conditions have resulted in significant market dislocation,” Goldman said. “Across most sectors, there has been an increase in overlapping trades, a surge in volatility and an increase in correlations. These factors have combined to challenge many of the trading algorithms used in quantitative strategies. We believe the current values that the market is assigning to the assets underlying various funds represent a discount that is not supported by the fundamentals.”

Other Goldman Sachs Hedge Funds

The two other funds that have recently come under fire include the multi-strategy fund Global Alpha and the North American Equity Opportunities Fund (NAEO). Goldman has said “The market dislocation impacting equity quantitative strategies has adversely affected NAEO’s performance and has been a key contributor to Global Alpha’s disappointing performance. We have reduced risk and leverage in these funds as well. At their current levels of equity capital, we believe the funds are positioned to actively pursue market opportunities.”

Will Goldman Sachs Leave the Hedge Fund Business?

Never. Doesn’t listen to journalists who predict Goldman’s flagship fund going down in flames as an end to their play in this industry. The most recent trend with Goldman Sach’s strategy towards hedge funds has been to invest and take partial ownership in dozens of medium to large sized hedge funds. This allows them to help grow these hedge funds while also participating in the upside of a diverse ray of hedge fund managers and strategies.

If you are a homeowner in need of an equity loan, but do not wish to refinance your existing mortgage, you have the choice of an equity line of credit or a second mortgage loan. Each option has advantages and disadvantages over the other. Here are several suggestions to help you decide which home equity loan type is right for you.

Home equity loans come in two flavors: second mortgage loans and home equity lines of credit. Depending on your reasons for borrowing and the amount you need for the loan, choosing the right home equity loan for your situation could save you thousands of dollars. Here are the pros and cons of both loan types.

Equity Lines of Credit

Choosing a Home Equity Line of Credit, or HELOC, gives you the greatest amount of flexibility. If you are using equity for renovations to your home, an equity line of credit offers the flexibility to make sure the job gets done. Home improvements and renovations rarely come in under budget; if you only planned for a fixed amount on your project, you could find yourself short when unforeseen circumstances arise. Equity lines of credit offer a debit card you can use for purchases just like a credit card that is tied to the equity in your home.

There are disadvantages to Home Equity Lines of Credit. These loans typically come with variable interest rates that are higher than comparable second mortgage loans. Because the loans come with variable rates the lender will adjust the interest rate and payment amount at regular intervals. This means your monthly payment will almost always go up when the lender resets the loan. Another disadvantage of this type of loan is the ease of access provided by the debit card. This ease of access could tempt you to spend more money than you had intended.

Second Mortgage Loans

Second mortgage loans have many advantages over equity lines of credit. These loans come with fixed interest rates and allow you to borrow a specific amount without the temptation to overspend. Second mortgage loans are ideal for homeowners that want to consolidate their bills into one low payment. When you take out a second mortgage for this reason, it is important to remember that debt consolidation does not eliminate your debts; it simply moves it around to make it easier for you to repay. You gain a tax advantage with home equity loans, the interest you pay on these loans can be deducted on your Federal Income tax.

There are risks associated with both varieties of home equity loans. Because home equity loans are secured by your property, if you fall behind on the payments your lenders could foreclose and take your home. The interest rate you qualify for on your home equity loan will be higher than the rate of your primary mortgage because this lender assumes more risk for the loan.

You can learn more about your second mortgage and home equity loan options by registering for a free mortgage guidebook.

Despite the present economy, people are still buying homes. But not everyone can or should buy a house. I say buy, not own, because you don’t own it, the bank does until you pay it off.

A couple recently bought a house in an area near where I live. They paid the special (lower) preconstruction price and, endowed with an inheritance, paid for several costly upgrades. When the house was built the buyer discovered that, but for the kitchen and bathrooms, the tile flooring they’d ordered throughout the house had morphed into mediocre carpeting. They paid for pricey Corian kitchen counter tops and got Formica instead. The screen-enclosed patio became an open patio. The bedrooms were two and three feet smaller than had been agreed upon. The builder blamed the “necessary adjustments” on rising costs of everything due to that old black magic, oil. The enraged home buyers, who should have kept a closer surveillance during construction, are suing the builder.

A young couple with their first child had finally saved enough of a nest egg to purchase a home. They had specifically requested a plain vanilla 30-year mortgage. Unaccustomed to reading all those nasty closing documents, they nearly missed the item that indicated a 30-year, 10-year interest only ARM (adjusted rate mortgage). At the end of ten years the interest rate could be in the stratosphere. Having paid interest only, or even a tiny bit of principle for the first 10 years, the couple would have had all that principle to pay off at a higher interest rate and still have no equity.

You really need your wits about you in the minefield of real estate agents, brokers and bankers. Prospective homeowners are encouraged to buy into creative mortgage loans such as ARMS, home equity loans called HELOCs, and interest only loans without completely understanding them. I’ve seen ads that shout out: “Will pay all closing costs.” “Will pay your first six months mortgage.” “We’ll pay the first $2,500 of your closing costs.” “Don’t Worry About Your Credit.” Lenders are in business to make money. They don’t tell you about the hidden fees, they don’t tell you that you will be paying a much higher interest rate to make up for your not so good credit or their commissions. In the end you will be paying more, not less and it is all perfectly legal. If a variable rate mortgage is what you want, fine. Just be sure you are getting what you asked for, understand it and can afford it.

In the investor frenzy during the housing boom, the state of Florida had hundreds, maybe thousands, of condominium conversions-rental apartments that became condos. Not a good idea for someone who wants a home rather than an investment. In purchasing a condo that previously was a rental, the buyer has no way of knowing whether the original structure was built by the same standards that are applied to single family homes, town homes or condos designed for individual ownership. In most rentals you will find rough concrete underneath inferior grade carpeting; the walls may not be properly insulated, the window fittings might not be up to higher standards. These features are extremely vital in areas subject to weather extremes. Now many of those condos are reverting back to rentals because the bubble has run out of fuel, and investors who got in too late or were greedy are on antidepressants.

With interest rates ticking up and home prices falling or at least leveling off, is now a good time to buy a home? Judging from the scary number of nationwide defaults today, owning is not for everyone. If you are not paying off your credit card bills each month, you are getting deeper in debt. The pundits tell us that it is better to own than to rent. They say renting means throwing your money down the rat hole, whereas owning allows you to build equity. Yes. But have you ever made your way up to the cashier at the supermarket and asked if you can pay with the equity from your house?

My theory is, unless you have discretionary funds, you should not buy a house. Repeat after me. I will always, always save extra cash for the money pit (house). The money pit will require repairs; the money pit will want adornments. Along with the adornments the money pit will most certainly demand better security protection. Destructive weather patterns being what they are, the money pit will scream for storm shutters. Down the line, are roof repairs, outdoor property enhancements and all the myriad stuff you never considered back when you opened that bottle of Champagne.

Unless prices come down and salaries rise (been flat too long), the American Dream for the American middle class might be just a dream.

“Simplicity-Courage-Humor-Soul”®

When it comes to real estate, there are few things more important than equity. All of the advice given to first-time homebuyers centers on how much equity they are likely to build in the time they will be living in the home. Additionally, when it comes to getting a home equity loan or selling the house, knowing how much equity you have built up is quite important. It will determine how much cash you end up with. And that is no small consideration.

A Definition of Equity

Most of the time, equity refers to the amount of “ownership” you have in a particular piece of real estate. A set amount of cash is the main expression of the equity in your property. Equity is usually built by a combination of two things:

1. Making mortgage payments

2. Increases in the property’s value

The longer you have the real estate, and make payments on it, the more equity you are going to build up in the property. And if you live in an area where the home values are increasing, you will find that helps with your equity as well. This is the reason that the general advice is to buy only if you plan to stay in a home for at least five years. This gives the property time to appreciate, and it allows you the time to pay down some of your property loan’s principal.

Determining Your Real Estate’s Equity

It is usually very simple to figure out how much equity you have built in your real estate. First, you need to find out what the current market value of your home is. You can do this by talking to a variety of real estate agents, mortgage loan officers, and appraisers. Next, you subtract the amount that you still owe from the market value of your home. The result is your equity. Here’s an example:

You bought your home 11 years ago with a loan for $115,000. Now, however, the property at current market value is worth $135,000. And you have paid down some of your loan, still owing about $75,000. To figure your equity, you subtract the $75,000 from the $135,000 for a total of $60,000. This is about how much you could expect to pocket if you sold the home at current market value, or the amount of money you would have access to with a home equity line.

Effective immediately, homeowners in danger of foreclosure have a new way out. Until the end of the year 2012, Obama’s home loan modification plan is in full swing. The loan modification project is part of the Making Home Affordable plan, and collectively the plan will save up to 9 million homes from foreclosure nationwide.

Everyone knows that the economy is in a difficult situation right now. The current recession has encouraged a dangerous spiral of layoffs and wage reductions at work, which in turn leads to foreclosures and delinquent loan payments at home. That’s why foreclosures have skyrocket in number, and property values have plummeted. One foreclosure can affect the prices of all the homes in a neighborhood. One study estimates that a home can lose up to 9% of its value when a neighboring home is foreclosed. Therefore, not only people who directly experience foreclosure are affected. Many often owe more on their mortgages than their home is worth, and others are in danger of foreclosure.

The President’s Making Home Affordable plan gives two broad options to citizens with home loans that find themselves in financial crisis mode. Concerned homeowners are asked to speak with a HUD-approved financial counselor for no charge. With the counselor’s help, they go over their financial portfolio and may be directed to a Hope for Homeowners refinance. These refinances have special rules that accommodate many more people than old rules used to. In the past, people have needed 20% equity in their homes before they can refinance, but Hope for Homeowners relaxes that requirement, meaning that falling property prices has erased much of the equity that homeowners have built up in the past. The plan keeps falling house values from hurting homeowners who can’t make monthly payments.

If a Hope for Homeowners refinance doesn’t work for them, HUD counselors are directed to offer a second option. The President has created a $75 million Homeowner Stability Initiative to modify the mortgage loans of 4 to 5 million American homeowners living in crisis. Lenders may modify certain loans under a consistent set of guidelines in order to lower monthly payments to 31% of a borrower’s gross monthly income. The money in this initiative goes to pay financial incentives of $1,000 to lenders and borrowers who participate in the program. If the lender deems that a modified loan with incentive payments is more profitable for them than foreclosure, the loan is modified.

There will be a three-month trial period for modified loans. For the next 90 days, the borrower pays on the new modified monthly premiums, and if that is done successfully the modified loan terms stay in effect for the next five years. The interest rate stays at its new low rate for those five years, after which it can be raised 1% per year until it reaches market averages.

The President’s Making Home Affordable project tries to respond to the concerns of real homeowners like you who are worried about high monthly premiums, due to loss of income or loss of home equity. Obama’s loan modification plan will cut back on the country’s high number of annual foreclosed homes, gradually causing economic conditions and house prices to go back up.