The Obama foreclosure prevention program is tasked with increasing the number of allowed home mortgage refinancing applications, boosting the number...
The Obama foreclosure prevention program is tasked with increasing the number of allowed home mortgage refinancing applications, boosting the number of permitted loan modifications by banks and other lending institutions, and stimulating the offer of more new mortgage loans to those who are buying a house for the first time.
This initiative of the President was provided with much needed help by legislation known as the Helping Families Save Their Homes Act that was signed into law in May 2009 by the President. This law is a follow through for the Hope for Homeowners Act that preceded the above legislation and it had the goal of assisting homeowners who were underwater in their mortgages.
One of the major aspects of the Obama foreclosure prevention program is to aid homeowners in getting the approval of banks and other lending institutions for the refinancing of their loans to bring down their monthly payments and make it easier for them to avoid foreclosure. It should be noted, however, that a prerequisite for refinancing is a loan balance that is not greater than the current market value of the property by more than five percent. The Obama initiative also offers an incentive to a bank or lender every time an application for loan modification is allowed and decreases the monthly installment to a value that does not exceed 31 percent of the monthly income of the homeowner. By providing additional funds to Freddie Mac and Fannie Mae, the Obama foreclosure prevention program also encourages the provision of more loans to first-time home buyers.
The Obama plan, however, had failed to cause a noticeable effect on the housing crisis as of September 2009. Therefore, critics were quick to point out what they think are the deficiencies of the program and that it is destined to fail. On the one hand, supporters of the Obama foreclosure prevention program countered that it is beginning to have some positive effects. The program seems to have been the main cause of the turn around in the continuing slid in home market prices and the increase in foreclosure filings in some states.
In response, opponents of the President’s plan observed that only a small minority of those who should have been eligible of loan modifications were given the go signal. Some critics also noted that the Obama foreclosure prevention program was not founded on sound economic principles. But the members of the Obama Administration are firm in their support for the program and have reported that a significant achievement was made when the number of loan modifications that have been approved surpassed 500,000.
Boosting the number of approved refinancing applications, increasing the approval rate for home loan modifications, and providing more new home loans to people who are buying a home for the first time are three of the main goals of the Obama foreclosure plan. The key element of the program is the Helping Families Save Their Homes Act that was approved by the President in May 2009. This law was designed to add to the features of the Hope for Homeowners Act that was formerly established to assist homeowners who have mortgages that are underwater.
The Obama foreclosure plan is designed, first of all, to provide assistance to borrowers in obtaining the approval of banks and other lending institutions for the refinancing of their loans for the purpose of lowering their monthly payments as a way to avoid foreclosure. However, to be eligible for this component of the plan, the loan balance of the borrower should not exceed 105 percent of the price at which the property could be sold.
Another part of the President’s initiative is to pay a certain bonus to banks and other lending institutions for each loan modification that they approve and this has the goal of ensuring that monthly mortgage payments do not go over 31 percent of the borrower’s monthly salary. The third component of the Obama foreclosure plan is to offer more new home loans by channeling more funds to the two corporations that own the majority of the mortgage loans.
But the Making Home Affordable Program has had only a slight effect on the housing crisis as of September 2009 and its adversaries were quick to focus on its negative aspects. Meanwhile, the allies of the Obama foreclosure plan point out that it has begun to produce some positive results. In particular, they claim that the program has been vital in arresting the plunge in home prices and the rising number of foreclosures in some states.
However, the people who do not believe the President’s program have pointed out that only a small number of applications for home loan modifications have been approved by banks even if the homeowners are qualified. Other opponents also observe that the Obama foreclosure plan is not supported by sound economic theories. Nevertheless, the Departments of Housing and Urban Development and the Treasury have proudly released reports that a critical milestone on load modifications had been achieved.
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The first thing to do when you think that your home is in danger of being foreclosed is to simply contact the bank and inquire about their policy regarding the foreclosure process. When the bank actually activates this proceedings will actually depend on their policy and it is more advisable to inquire when the process will likely commence. While some banks begin the process after 90 days of nonpayment of the mortgage, some may take longer or some may do it earlier. Therefore, you can never be sure unless you ask the bank and they may even be willing to delay the process if they find that you are willing cooperate with them in looking for a solution. What is important is that you are honest with them regarding your present condition so that they may be able to formulate the best solution for you if it is possible.
The next thing to find out about the foreclosure process is, of course, how long it would take from the time the procedure was started to its completion. This will also depend a lot on your bank, although the shortest time is six months while other banks may take longer. You can phone the bank and ask for someone from their foreclosure department regarding this information.
Another vital information with regards to the foreclosure process is the particular person that you should be dealing with in the bank. This may vary with time because at the start, you may have to work with someone in the workout department. But if your property goes into foreclosure, your file will be sent to the bank’s foreclosure department.
It is important to keep in constant contact with the bank so that you will be informed about the person with whom you should be talking to. If you do not do this, you may be phoning or transmitting your documents to the wrong person, thereby resulting into a waste of time. You would not want this during the foreclosure process because time is precious when you are attempting to save your home.
During the foreclosure process, it is also advisable to learn about the different options for avoiding foreclosure. These will depend on your situation and will require consultations with a foreclosure lawyer and the bank. It is also important to hire a lawyer right from the start so that you may understand the implications of the different paperwork that you come across during the proceedings.
This can help a lot in alleviating your fear about the foreclosure process and help you think logically to find the proper solution.
The President’s main strategy for his plan to combat the rising tide of foreclosures is to shift some of the funds that US Congress has approved for the attempt to rescue the financial services industry to the Making Home Affordable Program. The three main goals of the Obama Foreclosure 2009 strategy are: to stimulate the release of more new home loans, to encourage more approvals for refinancing, and to stimulate the approval of more home loan modifications.
The President wants to help out home loan borrowers whose outstanding mortgage loans are bigger than the market value of their properties to get the approval for refinancing the loan to ensure that their monthly payments are easy on their budget. The key requirement to be entitled for this part of the plan of the Obama Foreclosure 2009 program is to have a loan balance that does not exceed 105 percent of the prevailing market value of the property.
Meanwhile, the second component wants to induce the banks and other lenders to agree to the applications for loan modifications to ensure that the monthly payments are also affordable by making sure that they do not make up more than 31 percent of the borrower’s monthly salary. Lastly, the Obama Foreclosure 2009 initiative has provided more money to Freddie Mac and Fannie Mae for the purpose of allowing them to approve more new home loans.
The Making Home Affordable Program, which is the official title of the Obama Foreclosure 2009 initiative, has not achieved impressive results as of the month of September. Nevertheless, some people are of the opinion that the plan of the President is finally bearing fruit. It is believed that the Obama Foreclosure 2009 initiative has reversed the trend of sliding home values and increasing foreclosure rates in some states. Unfortunately, some of Obama’s critics are still unconvinced because they have observed that only a small fraction of those who have applied for loan modifications have been given the go signal.
Some people argue that the Obama Foreclosure 2009 plan has been developed without regard for solid economic principles. Nevertheless, the Obama Administration continues to be optimistic about the outcome of the program and has been incessantly reporting to the public regarding its progress. This was made evident when the Administration declared that it has attained a milestone almost one month before its scheduled accomplishment. The program’s goal of causing the approval of more than 500,000 home loan modifications has been reached before its due date. Thus, the Obama Foreclosure 2009 initiative continues to pursue its objectives and may soon achieve its ultimate goal of stopping the foreclosures trend.
