Obama's Foreclosure Plan

As I mentioned last week, the Obama Foreclosure Plan is really not having much effect, in fact… it seems that foreclosures continue to climb at alarming rates! The NY Times reported Friday that according to a senior Obama Administration Official, since the foreclosure program started more than 2 months ago only about 55,000 homeowners have actually been offered a modification to their existing mortgages! In the words of this writer… that is truly unacceptable! When the administration presented this plan several months ago, they stated it would immediately help 4-6 Million homeowners! I am no mathematician, but it sounds like a miserable failure so far!

Why is the Foreclosure Plan Having Such Limited Benefit?

There are likely many reasons the foreclosure assistance plan is not working as planned, and some of the most common things we see when looking around the web and reading about others hurdles, are due to multiple complexities involved! From second mortgages to unemployment, it seems that the majority of people really taking advantage of the plan are those who don’t really need it!

When the Obama Foreclosure Plan was originally put into action, it was designed with one main purpose… to help struggling homeowners who are in danger of foreclosure through no fault of their own! The reasons they are in trouble could be declining home values, job loss, and a myriad of issues out of their control.

Add into the quagmire the fact that most homeowners who ARE in trouble have already exhausted other method to stay afloat (not good methods either) like second mortgages, home equity lines of credit, and the worst… living off their credit cards, and you have a recipe for failure!

Who is the Foreclosure Plan Helping?

Just ask your friends, Co-Workers, or anyone with a job… the ONLY real impact the foreclosure plan has had, is to help those not at risk, to refinance at a lower rate! As the Fed continues to drop rates and make mortgages more affordable, those who are in a good position can jump on board and refi at little to no cost, often saving considerable amounts of money on the new loan!

You, I, and everyone else who is unemployed, self employed, or a small business feeling the effects of the down economy… well, we burn through our savings while waiting for a turnaround, since the banks don’t care to talk to us!