Obama’s Foreclosure Program

More foreclosures are coming! That’s the warning we’ve been getting for months from economists.

The problem is big government. Federal foreclosure programs have slowed the foreclosure process, but creating a huge pileup of homes on the road to foreclosure.

Loan modifications have simply delayed the inevitable. For hundreds of thousands of borrowers who faced foreclosure, the delays are over.
In April, banks canceled more than 100,000 temporary modifications to home loans made through the Home Affordable Modification Program (HAMP), the biggest federal foreclosure prevention initiative. That makes a total of 278,000 borrowers who once had temporary modifications to their home loans but who have since left or been thrown out of the program. Many of these borrowers are likely to lose their homes, if they haven’t already.

At the same time, hundreds of thousands borrowers found happy endings to their mortgage problems through the Obama Administration program. More than 295,000 borrowers received permanent modifications to their loans through HAMP by the end of April. They now are making new reduced mortgage payments, which will last at least five years. That’s 295,000 people who were on the brink of foreclosure who now have a much better chance of keeping their homes.

So the HAMP program is batting about .500. More than a half-million people have now gone through the HAMP trial modification process, split about evenly between people who received permanent loan modifications and those who were thrown out of the program.

After more than a year of delays, the program is moving.

As 2009 came to an end, the program seemed incapable of helping anyone. Close to a million borrowers had received temporary HAMP modifications of their mortgages through the program, but only a few thousand had those modifications become permanent, but many remain in limbo. Many banks seem determined to drive homeowners out of the HAMP program and into foreclosure.

Taken from AOL:Real Estate, May 21, 2010