Obama´s administration has been working on a plan to subsidize mortgage payments for struggling borrowers, to try and assist them before they are default. All previous endeavors by prior administrations, such as the Bush administration, were aimed at helping borrowers after they were already default, through lowering interest rates and loan modification. Obama is looking at spending $50 billion to assist borrowers. His plan would consist of borrowers taking an affordability test and re-appraisal to see if they would be eligible. Upon eligibility, subsidy would let servicers to adjust the loan , and more mortgage investors should be on board as they would not have to take a loss. Hopefully, by confronting the issue before default, more foreclosures could be prevented (to date there are 2 million for this year, which would in turn help level home prices.

Obama´s plan may also include revamping the modification process already in use for default borrowers. Many organizations such as Fannie Mae and Freddie Mac are already working with those borrowers to make their payments more affordable with lower rate interests, longer terms, or principal deferral. Lawmakers and regulators are already asking all financial organizations to put a temporary halt on foreclosures until Treasury Secretary Tim Geithner announces their plan for foreclosure prevention. Rep. Barney Frank, D-MA, stated that he felt 95% of banks should enact the hold. According to RealtyTrac, the amount of foreclosures filed in January 2009 was 18% higher then that of the previous January. At total of 66,777 homes were repossessed in Jan. 2009, and whopping total of 1,081,395 homes have been lost since the start of the crisis in August 2007.