When the new rules go into effect, unemployment benefits will no longer count as income for determining whether a person qualifies for a long-term reduction in their mortgage payments.

So for people with no income other than unemployment, there will be no loan modifications – the chief tool for preventing foreclosures.

“It’s ridiculous how impractical the guidelines … are,” said Al Ripley, an attorney with the N.C. Justice Center. “They truly do not address the needs of unemployed people.”

This program is the centerpiece of the $75billion federal effort launched in February 2009 to stem foreclosures. President Barack Obama has said HAMP – the Home Affordable Modification Program – would help 3million to 4million people avoid foreclosure through 2012.

But only about 170,000 homeowners received long-term modifications in the first year. The small numbers drive criticism that the U.S. Treasury program is flawed, and that lenders do a poor job of implementing it.

Read more: http://www.charlotteobserver.com/2010/04/11/1369820/foreclosure-program-falls-short.html#ixzz0kr3caTLS

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Foreclosure program little help for jobless

That according to US REO and cited by an NAACP rep in a recent LA Times editorial. “The money should have gone to direct payments to homeowners, just like they did with the banks.”

Hard to argue with that logic (although US senators and even some authorized to dole out HAMP funds see it differently).

The nonprofit ProPublica has confirmed that only a tiny amount of the HAMP qualified mortgages have been given permanent status – and black Americans are underrepresented.

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Foreclosures among blacks still on the rise, despite stimulus

The changes reflect the continuing pressure that the administration is feeling to keep the HAMP program on track in the face of growing complaints that the bureaucracy and back-stabbing at the heart of the program are limiting its effectiveness.

Also under the revised rules, homeowners will have 30 days to appeal a rejection and during that time, lenders cannot conduct a foreclosure sale.

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Obama administration tweaks program to address shortcomings

The idea is to set aside $1.5 billion in foreclosure initiatives for homeowners in Nevada, Michigan, Arizona, California and Florida. All have seen at least 20% declines in home values in the past year.

So far, so good. The $1.5 billion is part of Obama’s larger $50 billion Home Affordable Modification Program and will be used to create an “innovation fund” that state agencies can tap for various efforts to reduce foreclosures they deem “preventable.”

Some of those plans include helping homeowners going through unemployment, or simply underwater on their mortage, or even those with multiple mortgages and home equity lines of credit. In other words, people who are in a world of hurt and could use the money.

Here’s where the problem comes in. The treasury estimates there are at least 1.5 million homeowners in these five states that meet the broad criteria set out above. It further estimates the cost of modifying their loans at around $12,000 each.

Let’s do the math, shall we? At 12k a pop, $1.5 billion will only provide help for around 125,000 homeowners ($12,000 x 125,000 = $1.5 billion).

125,000 homeowners will surely appreciate the help, but that is a far cry from 1.5 million that are desperately in need of help.

To be fair, Obama has acknowledged that not everyone will be helped under this latest plan – nor is it necessarily advisable that everyone who took out a ridiculous loan should be allowed to get it modified.

“I’ve got to again repeat — government can’t stop every foreclosure,” said the President. “There’s not enough money in the Treasury to stop every foreclosure.”

Of course, let’s hope that the modifications actually make it to the people who need them most and not to simply irresponsible borrowers who helped create the collapse and have managed to find loopholes to avail themselves of the bailout.

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Obama’s Newest Initiative Helps … Well, A Few

What’s more, that figure has been on the rise in recent months.

But dig deeper, and there are some worrying trends. The number of new homeowners securing trial modifications is near the lowest levels since the program began. And while the share of homeowners who have converted into permanent modifications has been on the rise, it isn’t nearly enough to keep up with the number of newly eligible borrowers.

Translation? The much ballyhooed Home Affordable Modification Program has been and continues to be successful on the margins, but it isn’t going to stop the large number of foreclosures that will come into the market this year.

Something is better than nothing, of course, but so far it isn’t as much as officials and economists has hoped.

We should have a better idea when paperwork is submitted and tallied for permanent modifications by the end of February and into March.

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Obama Foreclosure Program Shows Gains, But Cracks Appear As Well

The cram-down measure, which was introduced by Rep. John Conyers, D-Mich., chairman of the House Judiciary Committee, would allow bankruptcy courts to extend repayment periods, reduce interest rates and fees and adjust the principal balance of mortgages so homeowners can avoid foreclosures.

Funny name for it huh…. “Cram Down” measure.

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Bankruptcy Judges May be Able to Modify Loans!

Even though the rate of foreclosure notices is slowing, according to RealtyTrac, default notices, scheduled foreclosure auctions and bank repossessions — were reported one in every 417 U.S. housing units in November. Up 18% from the same time last year.

Is this recovery? You be the judge! While our leaders are pork-barreling their way into the holiday break… which is likely to be another 20-30 days of time that nothing gets done, you and I are still struggling to get a break, find jobs that can actually support us, and figure out how we are going to pay that $18,000 tuition bill for a child in college after the holidays.

Recession… depression… downturn… whatever snap-label anyone wants to put on it, the economy is still in trouble.

Post from: Obama's ForeClosure Plan Website

One in Every 417 Homes in Some State of Foreclosure!

President Obama is expected to have the bill on his desk as early as this morning – and signed immediately!

For those whose benefits have already expired, this extension should automatically kick in, providing immediate relief to those in need!

Further Reading:

• More Help for Jobless
• Unemployment Bill Sent to House
• Senate OK’s Jobless Extension

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Extended Unemployment Benefits on the Way!

Short sale real estate transactions happen when a homeowner is unable to sell their home for the price that they still owe on their mortgage. This is very common now since property values have dropped significantly due to the recession.

Many homeowners are under financial duress and need to sell their property as quickly as possible in order to avoid foreclosure. These circumstances can happen due to the loss of a job or an illness. There are many reasons why someone may be no longer able to meet their monthly mortgage payments.

Another cause for this situation was the mortgage lenders themselves. They pushed through a number of loans with minimal down payments. When these loans are repaid the first few years of payments go directly toward the interest owed on the loan. If the homeowner is forced to sell their home and their property value has decreased, they will be unable to pay back the entire amount owed to the lender.

Before your home is lost to a foreclosure, you must consider a short sale real estate deal. Foreclosures will have a severe impact upon your credit and the proceedings can take several months to a year.

You will need the services of a professional short sale attorney if you want to be able to minimize the damage to your credit.

Once you hire a short sale attorney they can negotiate with your mortgage lender in order to reduce the amount of money that you owe on your loan.

Your short sale attorney will also be able to help you get tax protection for any amount of money that is considered a forgiven debt from the lender. You will be back on track to financial recovery much faster than if your home was foreclosed on.

Learn more about short sale real estate. Read Max Buchanan’s blogs where you can find out all about the market and when to use a short sale attorney and what they can do for you.

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Short Sale Real Estate Transactions

“From a technical perspective, the recession is very likely over at this point,” Bernanke said in responding to questions at the Brookings Institution. “It’s still going to feel like a very weak economy for some time because many people will still find that their job security and their employment status is not what they wish it was.“

Wait – I thought the God of the Financial World said the worse is past?!

Typical two-sides speakeasy from another appointed Politician!

Post from: Obama's ForeClosure Plan Website

Did You Hear? The Recession is Over!