Hey Everyone,

I just read an interesting article from the Florida Association of Realtors that talks about a federal assistance program possibly being created for bank lenders. The main purpose of the program would be designed to assist struggling homeowners by modifying and lowering their mortgage payments. The program, "Making Home Affordable", would pay the loan servicers an initial $1000 up front (per loan modification), and an additional $1000 every year for the next three years, as long as the borrower stays in the program.

What makes this program so interesting is that out of the $75 billion dollars (at least partially taxpayer funded, by the way), there are approximately 21 lenders or participants that were "heavily involved" in the subprime lending industry (the same industry being blamed for the recent challenges in the banking industry). While most of these lenders mainly just serviced the loans (i.e., collected the payments), a handful of them both originated and serviced the loans which means that the same banks that created the financial hardship will now be receiving funds to help minimize it.

Here are some estimates (courtesy of the Center for Public Integrity) of monies and incentives that some of the banks could receive:

Bank of America - up to $5.1 billion

Wells Fargo - up to $3.1 billion

JP Morgan Chase - $2.7 billion

Overall, the subprime lenders involved are expected to receive at least $21 billion in incentive payments (taxpayer funded). While a representative from the Financial Services Roundtable (a company that represents some of the large, national lenders) believes that these lenders are not to be held responsible for the struggles of the banking and financial industries, it certainly presents some eye-opening statistics for the everyday consumer.