President Obama and his supporters have been attempting to create a program to help subsidize home mortgages. This is an attempt to help fight the current credit crisis that has spread among the economy within the past few years. Of course there are many eligibility requirements to receive government aide on your mortgage.

The many things that this subsidy would provide to current homeowners who qualify for it include reduced monthly payments, incentives for borrowers, and incentives for the services that provide the mortgage. With a reduction in monthly payments, mortgage lengths will almost undoubtedly increase, which could help the buyers in the short run but will be having them pay more money in the long run. The incentives for borrowers include a balance reduction incentive for paying their mortgage on time. Loaner incentives could include a payment of $1,000 for each borrower that the incentive is applied to, and will also receive payments when the borrower pays their mortgage on time.

This mortgage subsidy will cost upwards of $75 million to the United States Government and ultimately taxpayers and will be provided by Fannie Mae and Freddie Mac. These subsidies will help reduce the number of people losing their homes and foreclosures throughout the United States.

The Mortgage Subsidy was officially placed in action in March of this year and has not been succeeding. Shares of both Freddie Mac and Fannie Mae are at less than $2, which was speculated to be much more when planning for this idea. Many experts are stating that this program is not preventing new home foreclosures, but rather just delaying them. The goal of this program is to provide upwards of 4 million people with mortgage relief, and has only benefited an amount less than 175,000 and is still struggling. It appears that the Mortgage Subsidy, while a noble effort, will not result in success.