Has the Barack Obama Foreclosure Plan Accomplished What It Has Sought to Do?

Guest Blogger — Sat, 06 Mar 2010 06:31:49 +0000

The Making Home Affordable Program, which is the official name of the Barack Obama foreclosure plan, has had mixed results in its efforts to prevent foreclosure for many homeowners in the face high unemployment rates and declining home values. As of the last week of September 2009, it is believed that the President’s plan has been slightly felt. Some argue that the Barack Obama foreclosure plan has been instrumental in the moderate drop in the number of foreclosure filings in some states and in the slower decline in home prices. However, many people still criticize the government’s program because only a small percentage of the homeowners who are qualified for loan modifications have been accepted into the program.

The heart of the President’s program is to channel $75 billion from the funds that have been set aside by Congress for the bailout of the financial services industry into the program to fight against the rising tide of foreclosures. The Barack Obama foreclosure plan has three main components and these are refinancing, loan modification, and more home loans. The first part of the initiative has the goal of assisting borrowers whose unpaid loans are bigger than the current value of their homes to get refinancing to minimize their monthly payments. For a person to be eligible under this component of the Barack Obama foreclosure plan, the loan amount that is not yet paid should not exceed 105 percent of the current value of the house.

The second component of this government initiative is designed to encourage banks to grant homeowners a loan modification to reduce their monthly payments so that they will not exceed 31 percent of the monthly income. Lastly, the Barack Obama foreclosure plan wants Freddie Mac and Fannie Mae to offer more home loans and therefore has provided these two organizations with $200 billion.

Critics have lambasted the Barack Obama foreclosure plan for not being founded on sound economic principles and for being naive. However, the federal government remains optimistic about the plan and has been issuing updates on its progress. The US Department of the Treasury and the US Department of Housing and Urban Development have revealed during the first week of October 2009 that the plan has achieved a milestone that has been projected for November 1, 2009. They pointed out that the plan’s goal of more than half a million trial loan modifications has been reached almost one month ahead of schedule. Thus, only time will tell whether the Barack Obama foreclosure plan is really capable of helping out the thousands of homeowners who are on the verge of foreclosure. For the scoop on foreclosure new stop by http://www.bestforeclosurenews.com

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Has the Barack Obama Foreclosure Plan Accomplished What It Has Sought to Do?

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