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Just like many others across the country, people in Arizona are hoping that President Barack Obama succeeds in his efforts to avert further foreclosures across the country. The president is set to travel to Arizona to launch his $50 to $100-billion program to address the foreclosure crisis.

Arizona is one of the top three states hardest hit by foreclosures in the past months, with almost 117,000 residential properties given foreclosure notices in 2008. According to foreclosure tracking firm RealtyTrac, Arizona foreclosures make the state’s housing market the third hardest hit by the economic crisis.

Across the nation, over 2.3 million homeowners received foreclosure notices in 2008. This figure is expected to increase further in 2009, according to RealtyTrac. Credit Suisse also estimated that about 10 million residential properties will be foreclosed from 2009 to 2012.

The case of construction worker Tim Iverson illustrates the difficult situation of laid-off workers across the country. Iverson, who lost his job in November 2008, worries about his mother and their situation as they are at risk of losing their home to foreclosure. They refinanced their house in 2005 for $212,000. Now, they can not sell it for more than $160,000 and can not pay fully the monthly payments with just his unemployment money and his mother’s social security benefit. Understandably, Iverson is one of many in Arizona hoping that their president will come and bring some relief.

President Obama’s plan is expected to make significant reductions in borrowers’ monthly payments so that more homeowners can save their homes from foreclosure. Analysts say that the plan could offer both incentives and pressures to mortgage lenders to work out loan modifications with troubled borrowers.

The goal for modifications would be the reduction of monthly payments to about 30 percent of borrowers’ gross income. The payment reductions could be achieved by reduction of interest rates, reduction of the remaining principal balance, extension of the payment period and other flexible payment plans.

Several are also expecting that the president would endorse a proposal empowering bankruptcy judges to modify the provisions of a loan. Despite the opposition of mortgage lenders to this proposal, consumer advocates say that the mortgage industry need to bear some of the burden for everyone’s good.

There are also those who are concerned about the repercussions of using the taxes of responsible Americans to help pay off the loans of others who did not behave responsibly and who brought themselves to foreclosures. Mark Goldman, a real estate broker and mortgage lecturer at San Diego State University, has an answer to this concern. Goldman says that the taxpayer should not focus on what is fair, but on what will protect the value of his property.

Talking to one lender about loan modification is hard, how about adding home-equity loans to the picture. If the first and second mortgage cannot agree the homeowner is at greater risk for foreclosure.

Home-equity loan is a mortgage where the borrower’s house is used as collateral, secondary to a primary mortgage. SMR Research found out that as of June 30 home-equity loans reached $1.05 trillion.

Also called second-lien lenders, home-equity loans fall behind mortgages. This means that lenders cannot claim a forfeited home-equity loan by taking over a house unless the borrower does not have another loan. It is just parallel that the six big home-equity lenders have $2.75 billion uncollectible.

During the peak of the housing industry, when houses still has high value, home-equity loans are beneficial to the lender. In case of foreclosure, selling the expensive home can compensate more than is actually obligated.

But with the downfall of the housing industry, foreclosure resell is not enough to pay for the mortgage, nothing for the second lien lenders.

The fear of foreclosure is more heightened than ever so the government pushes lenders and investors to help the foreclosure-troubled. But home-equities had made this a challenge.

Having to go through the process of loan modification by decreasing balance, or lowering interest or prolonging terms of agreement is already a tedious task. What more having a home-equity loan.

Lenders, or the first lien think that by adjusting loan terms gives a window to also pay off second lien lenders. With the desire to receive compensation, home-equity lenders can be more aggressive. Conflict can arise making the process more difficult, making foreclosure loom closer.

Hope Now, a group of lenders and counselors, asks both liens to fix the problem together. The federal Hope for Homeowners project enhances Hope Now’s point by letting the first-lien lender pay the home-equity lenders, thereby making the first-lien policymaker. Though there are still some hitches in the process, it has been successful so far.

According to a survey, more and more homeowners are skipping their mortgage dues and credit card bills because they failed to manage their budget properly. If this habit goes uncorrected, these individuals will find themselves at risk of losing their homes to foreclosure.

In order to avoid being in such an unfortunate situation, you should make sure that you are planning and maintaining your budget properly.

For starters, you should try to figure out and keep track of all the things you spend your money on. To make it simpler for you to do this, you should go through your credit card receipts and checkbook entries. This will somehow give you a picture of how you are spending your money. Try to categorize the items into groups such as personal, housing, education, etc.

In order to make sure that you stay within your budget, list down all the projected expenses you have in a year. Be sure to include gifts, insurances, medical bills and other possible expenses. After coming up with the total amount, divide it by twelve and you will now come up with your monthly expenses.

One you have this amount, you need to look if your monthly income is enough to accommodate such monthly expenses. If needed, adjust your expenses so that it will equal your monthly income. You can accomplish this by determining whether items are needs or wants. Obviously, you must prioritize your needs.

One of the reasons why many homeowners go above their budget and find themselves with huge debts they could not pay is the lack of emergency fund. Without any savings, you will surely end up using your credit card or the money you set aside for other things, which leaves you with a deficit.

If you manage your budget properly and save wisely, you can be prepared for any emergencies and you will surely be protected against foreclosure.