During the recent election campaign, President-Elect Obama called for a 90-day memoriam on foreclosures to give homeowners more time to find a solution. The thinking behind the proposal is that rampant foreclosures will only deepen the economic crisis.

However, according to an article in American Banker, the plan has mortgage servicing companies nervous. No surprise that they oppose the plan - after all, they will suddenly have less money coming into their coffers and be prohibited from taking back homes.

Some lenders, such as JP Morgan Chase, have temporarily stopped foreclosing on homes. Chase has pretty deep pockets and can afford this largesse, but the smaller lenders and servicing companies are the ones that stand to lose the most in the event of a mandatory federal moratorium.

The hope among the smaller companies is that the voluntary suspension by the larger lenders will be enough to stave off federal intervention.

But let’s not think for a moment that JP Morgan Chase is playing “good cop,” or acting out of corporate benevolence. If foreclosures stop then the bank doesn’t need to worry about having huge inventory of houses on the corporate books. In addition, letting past due balances pile up gives mortgage companies the ability to tack on continued late fees and other default-related fees - the bread-and-butter of the mortgage servicing industry.

So is a 90-day moratorium a good idea? Probably not in the long run, though it’s an easy sell to the public. 90 days doesn’t give a homeowner a ton of time to get out from under the crushing mortgage debt, and it lets servicers jack up the mortgage balance significantly.

A better idea? Homeowners should face the problem head-on and consider foreclosure defense, workouts and Chapter 13 bankruptcy.

In an effort to keep the economic system from getting any worse, the Federal Deposit Insurance Company (FDIC) has unveiled a plan to prevent 1.5 million homes from going into foreclosure by offering to share the losses that lenders typically experience when they refinance a home. According to FDIC chairwoman Sheila Blair, the $24 billion price tag for the plan would be financed with the money from the $700 billion bailout plan.

The plan still has some hurdles to overcome. For instance, Treasury Secretary Henry Paulson has dismissed it as a “subsidy or spending program” and said that the bailout is “investment, not spending.” However, the FDIC is moving forward with its plan and has posted the outline of the plan on its website.

The intent of the plan is to make mortgage modifications more attractive to lenders. Historically it’s been nearly impossible to get a mortgage lender to voluntarily renegotiate the terms of a mortgage. Why? Because the homeowner typically interacts solely with the mortgage servicer - the company that collects payments. The servicers work under strict agreements with the owners of the loans, and there is typically very little they can do on their own.

The FDIC plan comes shortly after fears within the mortgage servicing companies of a 90-day federal moratorium on foreclosures. The fears expressed by lenders involve the very thing the FDIC hopes to minimize: the losses incurred when loans are renegotiated.

The FDIC plan is now nothing more than a proposal, and one with obstacles to overcome. However, it does represent hope for some homeowners.

But if you’re having problems paying your mortgage, don’t wait for the FDIC plan to go into action. Remember - even if the plan goes into action you may not qualify for their assistance.

Be proactive. Contact a qualified foreclosure attorney who can help you work through your foreclosure problems.

During the height of the housing boom, getting a home loan was easy. Lenders offered attractive incentives like low down payments and low initial interest rates. However, once the bubble burst, housing values plummeted as obtaining a loan became increasingly difficult. Now, many homeowners that took advantage of the lending boom have found themselves living in homes that are worth less than they owe on them.

Since they are falling behind on the mortgage and they cannot recover the money by selling, an increasing number are opting to let the bank take the home in foreclosure. Called walking away, this may not be the best course of action.

Someone considering letting the lender foreclose and simply walking away from the property may not have considered all the effects that a foreclosure can have. Having a foreclosure on your record may make it harder to get a new mortgage for at least five years. There is also the effect of foreclosure on your credit score to consider. With loans being much harder to get even for the best qualified consumers, you need to protect your credit rating at all costs.

Walking away from a home because you don’t like owing more on your home than the current market value is a bad idea. Home values rise and fall periodically - after the current market conditions have stabilized they will likely rise again. If you walk away now you’re locking in your losses rather than possibly reaping gains in the future.

Of course, if you can’t afford to make the mortgage payments then you may decide to walk away. But before you do, be sure to contact an experienced foreclosure lawyer to help you determine your best option.