Homeowners Affordability and Stability Plan

Housing and Economic Recovery Act. It uses cost sharing and incentives to encourage lenders to reduce homeowner's monthly payments to 31 percent of their gross monthly income.^[3] Under the program, a lender would be responsible for reducing total monthly mortgage payments (PITI) to no more than 38 percent of the borrower's income, with the government sharing the cost to further reduce the payment to 31 percent. The plan also involves potentially forgiving or deferring a portion of the borrower's mortgage balance. Mortgage servicers will receive incentives to modify loans and to help the homeowner stay current, though participation by lenders is voluntary.^[4][5][6]