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Impact of Barack Obama and the Foreclosure Program on Borrowers
By Mike | February 22, 2010
The main point of the foreclosure avoidance program of the President is to shift some of the funds that have been earmarked by Congress for bailing out the financial services industry and to the battle against the rising number of foreclosures. Specifically, the provision of a bigger number of home loans and the stimulation of more refinancing and loan modifications are the main goals of Obama and the foreclosure avoidance program.
The strategy is to assist home borrowers whose properties have lower values compared to their outstanding loans to obtain a refinancing of their loans to lower their monthly payments and make them more affordable. The key requirement to be eligible for this part of the plan of Obama and the foreclosure avoidance program is to have an outstanding balance that is not more than 105 percent of the prevailing market value of the property. And for the second segment of the plan, banks and other lenders are being encouraged to approve applications for loan modifications that will ensure that the monthly payments will not surpass 31 percent of the borrower’s monthly salary. Finally, Obama and the foreclosure prevention program have provided additional funds to Fannie Mae and Freddie Mac to allow them to offer home loans to more borrowers.
The Obama and the foreclosure prevention strategy, or what is known at the Making Home Affordable Program, has only been able to achieve mixed results so far. However, some are of the opinion that the President’s initiative is finally offering a number of positive results. It has been noted by some that Obama and the foreclosure prevention plan have caused a deceleration in the rise of foreclosure rates and a slight rise in home prices in certain states. Nevertheless, many people are still worried because very few of those who should have been eligible for the home loan modifications have been given the go signal by the participating banks.
Opponents of Obama and the foreclosure prevention plan point out that it is not based on acceptable economic principles. Nevertheless, the US government is still positive that the plan will work and has been continuously posting the results of their efforts. The Administration has proudly announced they have finally attained a milestone almost a month ahead of schedule. It is claimed that more than half a million homeowners have been given loan modifications well ahead of November 1, 2009. Thus, Obama and the foreclosure prevention initiative is still alive and well and only time will tell whether it will be a success or a failure. For more information like the above stop on byour site by clicking here
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