With mortgage fraud cases up 400 percent from five years ago, the new administration in Washington, D.C., plans to do something about it to protect the increasing amount of vulnerable homeowners who are falling victim to con artists.

ABCNews.com reports today that a renewed effort, which will be spearheaded by the Financial Crimes Enforcement Network, will “ratchet up its efforts to identify fraud suspects for civil and criminal investigation and issue an advisory to help financial firms flag questionable modification schemes for law enforcement.”

This latest initiative opens up a new front on the battle to stem the foreclosure tide.

Already, the administration has implemented the “Making Home Affordable” program to help “underwater” homeowners refinance their mortgages, as well introduced a limited-time $8,000 tax incentive for first-time homebuyers to spark interest in home purchases.

Here is a snip from Treasury Secretary Tim Geithner on this important development:

“Just as this administration has intensified our efforts to help American homeowners, those who would seek to prey on the most vulnerable are intensifying their tactics as well, often through purported mortgage modification and foreclosure relief companies. These are predatory schemes designed to rob Americans of their savings and potentially their homes…. We will shut down fraudulent companies more quickly than before. We will target companies that otherwise would have gone unnoticed under the radar. And we will aggressively pursue individuals involved in mortgage rescue scams.”

For more information on how to avoid foreclosure scams and other red flags of which to be aware click here (click on “Five Tips for Avoiding Foreclosure Scams”). In the meantime, if you’re having trouble meeting your monthly mortgage obligations click here. We’ll connect you someone who can help.

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.

Mortgage industry titans Fannie Mae and Freddie Mac, which have been under government control as of September 2008, will allow select borrowers who are in financial distress to remain in their homes as renters rather than lose them to foreclosure.

Fannie Mae was the first to make the move early last month. And according to a recent article in Business Week, the finance company has already “stopped about 20,000 foreclosure sales and halted 6,300 evictions of owners or renters this winter.”

Those are some staggering statistics for such a short time frame. But welcome news nonetheless for those who were able to take advantage of the assistance.

In addition to keeping people in there homes, the goal of the plan is to ensure that properties don’t fall into “disrepair.” The surge of defaults has had an unsightly impact on neighborhoods throughout the nation, knocking down home values and, in some cases, inviting trouble.

Here is a snip from Freddie Mac Chief Executive David Moffett:

“Keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market.”

Fannie Mae and Freddie Mac “own or guarantee about half of the $10.6 trillion in outstanding U.S. home loan debt,” which certainly makes this latest news a step in the right direction. Finding and creating ways to keep people in their homes is a good thing on so many different levels.

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.

“I think the most important thing when it comes to declining home values is number one, preventing further foreclosures. That just erodes home values across the board.”

– President-elect Barack Obama comments on the importance of preventing the recent surge of foreclosure situations from rising any further across the nation in a recent Associated Press article. The incoming administration, which takes charge January 19, is considering whether or not to direct “some of the remaining bailout money to foreclosure prevention.” There is currently about $350 billion remaining of the $700 billion that was earmarked back in late 2008 to revive the economy and inflate the credit market. The current plan on the table would provide lenders with incentives to modify loans that are either already in default or headed in that direction. It is estimated that the plan could prevent 1.5 million foreclosures.