As the housing situation remains stagnant the Obama Administration looks to expand their $50 billion plan with a new program which will help people to modify their second mortgage or piggyback loans.

Much like the other plans they are offering cash incentives to lenders who agree to reduce the monthly payments or forgive the loans entirely.

Many people are upside down on their homes because they took out second mortgages to purchase homes with little to no down payment or to pay for home improvements, but those second-lien mortgage must be negotiated separately. This often makes it more difficult to modify primary loans.

This addition to the Housing Plan could help over a million homeowners.

Today Obama’s plan to help 9 million homeowners goes in to effect as it calls for companies to help struggling borrowers modify their loans.

Incentives for both the homeowner and the lender to modify the loan. With the loan modification their payment will be no more then 31% of their monthly gross income. “This plan will help make home ownership more affordable for nine million American families and in doing so, help to stop the damaging impact that declining home prices have on all Americans,” said Housing Secretary Shaun Donovan.

The company that lost over 110 billion dollars this last year has deemed it necessary to give bonuses to employees. Fannie Mae and Freddie Mac the two mortgage-financing giants that the government rescued last fall, have outlined plans to pay an additional $159 million in bonuses to retain employees in 2009 and 2010, on top of the nearly $51 million already paid out last year.

Although they have lost a record amount of money, they argue that there decisions are sound and necessary. “Mr. Lockhart who is from the Office of Federal Housing Enterprise Oversight, which now oversees the two companies, in his letter, defended the bonuses as necessary for protecting the taxpayers’ investment.”

It’s nice to see they are helping the right people.