Obama’s Housing Plan
Did you watch the State of the Union Addresson Tuesday? It’s Obama’s last before the election later this year. President Obama hit on a number of points and spoke firmly about using “government power to balance the scale between America’s rich and the rest of the public.”
No Solutions Yet
When Obama took office in 2009, he made big promises to address the mortgage crisis. We saw HAMP and HARP, and we’ve watched them fail. They were supposed to help 4 million homeowners. Three years later, only 910,000 homeowners have seen results. HARP 2.0 may provide an outlet for qualifying homeowners to refinance, but what is going to happen to those who are behind and in foreclosure?
This Florida homeowner was past due over $23,000 to Aurora Loan Services. They were approved for an in-house loan modification that will change their monthly mortgage payments from $3,267 to $2,054, for a monthly savings of $1,213. After making three trial payments they will be reviewed to make this modification permanent.
Homeowners were in foreclosure with a sale date on their New York home. Their sale date was placed on hold and they were brought out of foreclosure with a trial loan modification plan. Their payments to AHMSI will reduce from $1,775.63 to $1,319.80, which will qualify to become permanent after 3 successful payments.
GMAC had this family in active foreclosure after becoming over two years delinquent. Their monthly mortgage payment was $1,862.98 and an interest rate of 6.75%. They are now approved for a permanent modification that has brought them out of foreclosure. Their new monthly mortgage payment is $1,147.85 and their interest rate will be fixed at 4%.
“He was on his second trial modification, the last time his trial modification wasn’t converted to a permanent modification for some unknown reason, but Bank of America is here to help homeowners and they were nice enough to let him reapply…and so he did.
Like most of Obama’s foreclosure prevention efforts, this too has a few flaws. First of all there is no word so far on how compensation will be calculated or rewarded. There is of course also a concern that the “independent investigators” may not be very independent – a reasonable fear considering how beholden to the banks past foreclosure programs have been.
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