The recession and consequent unemployment has made many US citizens closer to foreclosure. The market value of the properties and homes has been declining resulting in uncertain income level of average individuals. More and more people find jobless from factories and organizations. President Barack Obama realized the current scenario and proposed a stimulus package in which those facing foreclosure are given freedom to select a loan modification programme to recover from the current crisis. The loan modification package can be availed by the borrowers through their lenders after clearing the necessary documents and papers requested.

To be eligible for this stimulus package, one must have an existing or modified loan owned by Fannie Mae or Freddie Mac. Further the home equity should be below 20%. In this package the qualified applicants are given loans, grants and tax credits to solve the mortgage crisis. These help them to lower the monthly payments towards the mortgage loan. By this, transferring a major income towards mortgage expenditure is avoided. Broadly speaking, the home owners receive the following direct benefit from this stimulus package.

1. The payment can be restricted up to 31% of the monthly income of the burrower.

2. Interest rates can be decreased to 5.16% from 6.5%

3. Those who are on variable mortgage rate are given freedom to select a lower fixed rate.

4. Through a loan modification, the present repayment schedule may be extended by 20-30 years.

The President Barack Obama's measure is to bring the American economy back to the former state by allowing the citizens more and concessions through various packages and programs.