President Barack Obama is rolling out a $75 billion plan to save millions of Americans from foreclosure. But how will it help Florida residents, one of the hardest hit states in the foreclosure meltdown? Obama’s plan will assist several groups of people, including homeowners who owe more than their homes are worth. The plan will also help people lower their monthly mortgage payments. Florida ranks second with the highest foreclosure rate. California is at the top of the list. Obama unveiled his foreclosure prevention plan in Phoenix, AZ Wednesday. It will pay lenders to reduce mortgage rates for families facing foreclosure. The rules wll change to allow mortgage giants Fannie May and Freddy Mac to refinance upside down homes, which are homes worth less than their mortgages.

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1. Do NOT fail to accrue savings for an emergency.

Many wants and needs face each of us each day. Every dollar we earn seems to have its path determined before it comes to our hand. This often results in people putting aside little or no savings for a rainy day. Yet, rainy days do happen, that fact we know. I would love to see homeowners with six months of mortgage payments in savings. As a minimum people should have one to three months of mortgage payments as a reserve to help stop a foreclosure.

2. Do NOT get caught without a Home Equity Line of Credit in place.

If something comes up forcing you to stop a foreclosure you will need money fast but the options may be gone by then. At least 90% of foreclosures could be prevented or delayed if home equity lines of credit were previously activated. Setting up an equity credit line can often be done for no cost and can lock in rates as low as 4%. In most cases you pay nothing each month if you do not access the line. No one ever expects sudden health problems, loss of a job or emergency requiring funds fast. By definition, these unforeseen events might prevent obtaining a loan once they occur. By setting up a home equity credit line before you ever miss a mortgage payment, you will have money when you really need it. No reason to fill out an application again, just write yourself a check. When things get back in order, pay back the line and then use it again the next time. Just be careful not to use the line for frivolous purposes and you will love your home equity credit line - especially if you never have to use it.

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For more information please visit: http://www.floridalawattorney.com/