It’s rather straightforward: If you don’t have a job, affording a mortgage is virtually impossible.

In fact, Barry Zigas, director of housing policy for the Consumer Federation of America, today tells the Christian Science Monitor that “the biggest single cause of foreclosure today is loss of income or employment-related issues.”

To treat the problem, and not the symptoms, the Obama administration pledged an additional $3 billion to support foreclosure prevention initiatives, extending beyond the current $75 billion “Making Home Affordable” loan modification program.

Here’s how the extra funds will be spread around:

“… the additional aid will go towards funding a new bridge-loan program for homeowners with reduced incomes in hard hit local areas, although those regions have not yet been specified. The program extends a no-interest loan of up to $50,000, which can last as long as 24 months, to assist homeowners with mortgage payments until they become financially stable.”

Previously, out-of-work homeowners received a three-month forbearance to find work and become eligible for a loan modification. However, with the average length of employment lasting up to 24 weeks (six months) more needed to be done.

The latest initiative is modeled after a successful program in Pennsylvania, which has helped about 45,000 distressed homeowners avoid foreclosure since 1983.

Two years into one of the most alarming recessions in the history of the United States, the Senate today approved the Wall Street financial reform bill, according to the Los Angeles Times.

It’s a “bold” and “controversial” piece of legislation that aims to “prevent financial firms from gouging consumers on mortgages and other financial products.” Risky lending, overstretched borrowers and complex sales of bundled home loans are among the many factors that led to an eventual housing/economic crisis.

From the report:

“The legislation also shuts down the federal Office of Thrift Supervision, which oversees savings and loans. That agency failed to prevent the risky mortgage lending that led to some of the biggest collapses of the crisis, including IndyMac Bank of Pasadena and Washington Mutual Bank, the largest thrift failure in U.S. history. Its duties merge into the Office of the Comptroller of the Currency, which oversees national banks.”

Of course, the bill, which narrowly made it through Congress, does have its detractors. Senate Minority Leader Mitch McConnell (R-Ky.) is one of them:

“I think it’s going to make credit harder for the American people to get, clearly harder for businesses to get…. It’s just this kind of uncertainty that will deter lending and freeze up credit … [the legislation] will create a vast new unaccountable bureaucracy that will impose onerous new regulations on struggling businesses.”

President Barack Obama is expected to sign the bill into law next week “in an elaborate ceremony touting it as evidence that Democrats are standing up for Main Street against the powerful financial industry and its Republican allies.”

Too little too late or just what the doctor ordered considering the current circumstances?

“Why am I paying for them? We are very frustrated and scared. My husband and I always discuss, ‘Why do we try to better ourselves, when it seems if you do nothing, you get all the help in the world?’”

– Michelle Fry echoes a feeling that many responsible and hardworking homeowners throughout the United States are feeling in a recent FOXNews.com article on the $75 billion foreclosure rescue plan that President Barack Obama recently announced. Fry and her husband earn less than $100,000 combined and are currently upside-down on their home in Atlanta, Georgia. The couple, however, does whatever it takes to ensure that their bills are paid on time. Meanwhile, the national mortgage bailout plan “appears to reward people who bought more house than they could afford and can’t pay their bills.” In fact, according to the article, the foreclosure rescue plan would help eight to nine million mortgage holders — a fraction of the approximately 50 million mortgages outstanding. Is it fair? Should it be?

Late yesterday Congress passed a revised version of the economic stimulus package, which is expected to create jobs (up to 3.5 million of them) and get the economy chugging once again.

The $787 billion plan will be likely signed into law on Tuesday, Feb. 17 by President Barack Obama.

We passed along news earlier this week that the proposed $15,000 tax credit for homebuyers was stripped from the bill even though it has received Senate approval. In a compromise, the existing $7,500 tax credit for first-time homebuyers was increased to $8,000 and extended five months from from July 1 to Dec. 1, 2009.

In addition, and perhaps more important, homebuyers who take advantage of the program are not required to pay back the $8,000 credit unless they sell their homes within three years.

That’s a tantalizing incentive for a lot of folks eager to achieve the American Dream and cash-in while home prices across the board at all-time low levels. Now, they can shave an additional $8,000 of the sale price, which is already drastically reduced if you search for deals on Foreclosure.com.

But what about the people who are struggling to remain in their homes?

President Obama has indicated that he will now shift his focus on the foreclosure issue, as well as other preventative housing initiatives. He is expected to outline his mortgage and foreclosure relief plan later next week during a speech in Phoenix, Ariz., on Wednesday, Feb. 18.

Stay tuned.

Perhaps lost in all of the “bad news” is that there is still well more than 90 percent of homeowners throughout the nation who are current on their mortgages. These folks have battened down their hatches and are prepared to ride out the “perfect” housing market storm until the bitter end.

But some of them may not make it.

In an effort to try and ensure that most do, President Barack Obama and his administration are considering a plan to assist cash-strapped homeowners before their homes fall into foreclosure. It’s a forward-thinking initiative that was met with optimism on Wall Street, according to a report on Reuters.com.

Here’s a snip:

“In a major break from existing aid programs, the plan under consideration would seek to help homeowners before they fall into arrears on their loans. Current programs only assist borrowers that are already delinquent…. Under the evolving plan, sources said homes would undergo a standardized reappraisal and homeowners would face a uniform eligibility test.”

There is clearly more meat to the plan, which is still in the early stages of development. However, Obama has pledged to use a good chunk of the leftover money ($350 billion) that remains in the second installment of the $700 billion “bailout.”

And this article reinforces that pledge, indicating (again) that at least $50 billion will be put toward reducing mortgage interest rates and other preventative measures to ensure that more homeowners can gently put the breaks on foreclosure before skidding out.

The sooner the better.

The race to rescue the national housing market is heating up. And it appears that Republicans and Democrats alike agree that action must be taken, but, of course, have different ideas of how it should be accomplished.

New York Times today has a report that indicates three different plans are afoot. Here is the very general description of each:

“Senate Republicans are seeking new tax breaks and up to $300 billion in mortgage subsidies to attract homebuyers. Democrats want to spend at least $50 billion on federal programs aimed at reducing mortgage foreclosures. The Obama administration is hammering out its own plan to spend $50 billion to $100 billion to prevent home foreclosures.”

This is all tied to the now infamous $700 billion “bailout plan” that went into effect in late 2008 to resuscitate a national financial system that was on life support. The first round of funds ($350 billion) was essentially earmarked to help nine of the largest major banks in the United States, as well as two of the top automakers with corporate operations stateside (General Motors and Chrysler).

Not a penny went to assist struggling homeowners, which was alarming because so many of them were falling into foreclosure situations.

That decision was met with public outcry about how the money was being spent.

Now the new Barack Obama-led administration is charged with ensuring that a solution can be agreed upon that keeps people in their homes and motivates buyers to start buy again. Sooner rather than later, hopefully.

In the meantime, if you’re having trouble meeting your monthly mortgage obligations click here. We’ll connect you someone who can help.

The revised $700 billion bailout plan, which was rejected just last week in its initial form, was today approved by the United States House of Representatives (263-171), sending an important message to the American people that their government is prepared to “rescue” that national economy from further collapse.

President George W. Bush — who has championed the bill throughout the entire process — now just has to provide his signature for the unprecedented initiative to move forward.

The bill will soon provide the government the authority to purchase bad mortgage loans and other poor performing assets from major lenders nationwide, unclogging the financial system and allowing credit to flow freely once again.

In addition to the $700 billion bailout for financial firms, the revised plan also includes “$152 billion in unrelated tax breaks and broader tools for federal regulators to deal with the growing economic crisis,” according to the Wall Street Journal.

This is certainly good news for homebuyers nationwide because loans will certainly be more available thanks to the new measure. The bad news is that it does not directly address or assist homeowners who are currently facing foreclosure.

Of course, we always encourage distressed homeowners to contact their respective lending representatives early and often and alert them about any personal financial problems that could result in missed mortgage payments.

In this type of economy, it is important to remember that lenders and banks are more interested in working out mortgage problems rather than taking additional losses.

If all else fails remember that there are also experts available who can help stop foreclosure. Click here.

It was a major move that proponents felt was required to resuscitate a flagging national economy and “unclog” the financial system.

However, news of the defeated plan sent the stock market into a nosedive, triggering the Dow Jones industrial to dip a staggering 778 points.

Major banks such as Washington Mutual have already failed primarily because of bad home loans that were never repaid. And others such as Wachovia are in distress, meaning that the more bad news could be on the horizon if something is not done soon to help right the economic ship.

In short, if lenders don’t have money to loan — or are concerned that loans will never be satisfied — Americans will find it difficult if not impossible to finance homes, cars, college educations and other big ticket (albeit essential) expenses.

Even though the most recent version of the plan was defeated, it appears that legislators on Capitol Hill are still set on working toward an acceptable resolution that will get the United States economy chugging again.

Let’s just hope it’s sooner rather than later.