How does Obama's foreclosure plan affect you?

Thousands of foreclosures have already devastated area suburbs, and many other whipsawed homeowners now are looking to the new administration for help.

They might just get it.

President Barack Obama Wednesday proposed a $75 billion Homeowner Stability Initiative that could offer incentives to mortgage lenders to help roughly 4 million borrowers on the verge of foreclosure. Many details still need to be determined.

"If theory becomes reality, then this could help homeowners here a lot," said Marve Stockert, executive director of Lombard-based Illinois Association of Mortgage Professionals.

Here's what the plan could mean for local homeowners who qualify:

• It targets homeowners who have obtained a mortgage within the last three to four years, a time when prices were the highest.

• The plan allows those with mortgages up to and including $417,000 to get refinancing at a lower rate.

• In addition, homeowners could modify mortgages despite their economic situation or the home's current appraised value. This is good for those who have homes "under water," or when the home has a lower appraised value than the mortgage.

• The plan aims to cut monthly mortgage payments to a more sustainable level, defined as no more than 31 percent of your income.

• Modified loans could save roughly $300 to $500 a month, money that could be spent to upgrade homes or pay for other things to help stimulate the economy.