The U.S Federal Reserve anticipates that in FY2009, the economy may shrink by a figure anywhere between 0.5% and 1.3%. It may be attributed to increase in unemployment, crisis in the housing market and credit crunch. Owing to the subprime mortgage crisis, incidence of foreclosure and bankruptcy have increased manifold. In fact, one of the reputed subprime lenders BNC Mortgage LLC, a subprime lending unit of Lehman Brothers had to close down.

The economic slowdown in United States and in the housing market specially has threatened many homeowners and many people have lost their homes already. To bring in some repose among the homeowners, President Barack Obama has unveiled his Mortgage foreclosure plan recently. More on Effect of President Obama’s New Mortgage Program on the Housing Market and Mortgage Market