As shortly as next week the White House will be announcing a new mortgage relief program. While the details are unclear it is expected to finally break the negative equity wall and begin to allow homeowners who are “not seriously delinquent” an opportunity to refinance – that’s right, there will be criteria under which underwater homeowners may refinance. It will be offered through FHFA so most homeowners should be able to apply.
Will It Work?
Struggling homeowners have been depending on the perilous loan modification process while refinancing have become even more popular even as it is reserved for more fortunate borrowers. This new proposal could allow homeowners to go through a more simplistic refinance to lower interest rates and monthly mortgage payments.
HOWEVER, the same obstacle is in place for mass refi’s – the banks! Loan modifications would arguably be much, much more successful if it wasn’t for the disorganized, ineffective way the nation’s largest mortgage lenders have treated millions of loan mod applications, and a large scale refinance program will likely suffer the same mistreatment. HAMP was expected to help up to 5 million people and yet billions of dollars for the program have not been used even as people who could have stayed in their home were foreclosed on.
Above all, this about PR – and we’re not talking just about the banks and the government trying to create the appearance that they care about the foreclosure crisis – it’s about principal reductions, one thing a refinance cannot accomplish. Home prices in America are still screwed up beyond belief and at this pace it could be years before the prices are allowed to level out. Consider consumer advocacy group The New Bottom Line’s proposal: “The Win-Win Solution: How Fixing The Housing Crisis Will Create 1 Million Jobs.”
There are two kinds of solutions for this crisis – the kind that maintain the banks’ status quo and hurt homeowners, and the kind that save homes and jobs and hold the banks accountable for destroying the housing market.
Until the time that those proposals come about, the only way to create this kind of accountability is when your home is defended by a qualified foreclosure defense attorney. With over 3,000 successful case results, Amerihope Alliance Legal Services knows all the ins and outs of negotiating loan modifications, stop foreclosure actions, and investigating the possibility of getting a mortgage principal reduction. Contact us today to see if we can help save your home!