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OBAMA’S MORTGAGE RESCUE PLAN IS A FAILURE

By DICK MORRIS & EILEEN MCGANN

Published on DickMorris.com on June 9, 2009

The data for April and May prove that Obama’s plan to rescue those facing mortgage foreclosure is a dismal failure. Since this issue was the cornerstone of his economic program during the campaign, its abject failure is a significant setback for the Administration’s economic plan.

In the month ending on May 26th, 464,983 foreclosures of subprime and Alt-A mortgages (out of a universe of 3.2 million studied). So 15% of all subprime mortgages were foreclosed in May! Only 19,041 — a paltry 6% — were modified during this period. And of those modified, only 11,200 involved any reduction in the monthly payments! Only 12% involved any write-off of interest, fees, or principal and 27% of the loan modifications actually increased the monthly payments due.

Alan M. White of the Valparaiso Law School, who conducted the study, noted that the data showed that "the Administration’s plan to stimulate mortgage modifications does not seen to have had much effect yet, at least in this market segment" [i.e. subprimes].

And the trend lines are all bad:

• The number of loan modifications dropped 11% from April to May.

• The ratio of foreclosure losses to modification write downs (the amount lost in foreclosure: the amount rescued by write-downs) doubled in the past month. For every dollar saved in modifications, $150 was lost in foreclosure.

When Obama launched his mortgage rescue plan, he promised that it would help five million households. So far, he is about 4,969,000 short of his goal!!

When will the subprime foreclosures stop? In about a year when all of these unfortunate people have lost their homes!

Why is Obama’s plan falling so far short of the mark? The fault is its own restrictions. You cannot get a loan modification if:

• You have lost your job

• You owe more than 5% above what your house is worth

• You are already in default

• You have not yet missed at least one payment

• Your lender does not want to participate

• Your mortgage is not one of the half of all mortgages insured or owned by Fannie Mae or Freddie Mac

• The reworked mortgage payment would come to more than 31% of your income

• Your mortgage is over $759,000

• The home is not your primary residence

The number of beleaguered homeowners who can slip through the eye of this particular needle and qualify for a mortgage modification is tiny.

(We discuss failure of Obama’s mortgage relief program at length in our new book Catastrophe, due out on June 23rd. Pre-orders of signed books are available at DickMorris.com)

And yet there is an easy remedy at hand. Obama should simply say, as they did in Sweden, that the government will simply buy the distressed mortgages from the banks and adjust the payments to make them possible for the homeowners. Then, when the economy comes back, the homeowners could either pay back the government what they owe for the postponed payments or sell the house and repay the feds from the proceeds. If they won’t do either, the feds could then seize the house and get their money back. Cost to the taxpayers: zero. In f act, they would likely make a profit.

Why won’t Obama do this? It’s because a Democratic administration cannot throw people out of their homes. Better to let them default and make the big, bad bank do the dirty work.

All these facts underscore how cynical was Obama’s campaign in predicating so much of its economic message on an appeal to help those facing foreclosure. You don’t hear Obama talk about foreclosures any more do you? That’s because he knows he has no solution and that he won’t offer any.

Good copy paste and edit. The Dems are trying their best to fix this country. Show some support. Don’t be like the conservative un Americans who want to boycott GM and Chrysler.

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I’m not from Australia, but I would assume paying the amount due will stop this, you could also try to refinance with another lender, or prove hardship with your financial situation to get a second chance.

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It doesn’t matter what the type of loan is - VA, FHA, Conventional or otherwise.

See an attorney.

Your options to keep your home or buy time are limited. Of course you can come up with the money to halt it. You can also look into a Chapter 13 bankruptcy filing.

But see an attorney. Foreclosure is a serious issue best handled outside of Yahoo.

Good luck

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we live in wayne county michigan. 2 days ago we found a note on the door that said our house was going up for sherrifs sale in approximately 30 days. what can we do to prevent the sale / foreclosure of our house. if we pay the past due amount does this stop foreclosure…….PLEASE HELP………this is serious so please no smart remarks……..JUST SOUND ADVICE

Find out what needs to be paid and pay it. Call your bank! Otherwise you are out.

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There would be less home foreclosures if people would work harder to stop a foreclosure before it even starts.  The problem is that lenders up until now were unwilling to help people to have their loans modified to better suit their new economic status and refinancing wasn’t always an option due to the decline in real estate value. 

So, how do you stop a foreclosure before it starts now?  The first thing you need to do is talk to your lender if you are having trouble making your payments.  The first time your mortgage is due and you are struggling to pay the entire amount is when you need to be on the phone discussing your alternate payment options.  If you have never been late before, your lender may not believe you are hitting an economic crisis, so you may need to provide proof, but you have many options now that you might not have at a later date, so as soon as you wind up struggling to make your mortgage payment, you need to act so that you can stop a foreclosure before it happens.

• If your crisis is a short term thing, see if you can make part of your monthly payment for a couple of months and stretch out the remaining balance over a period of time.  This will help protect your credit rating and ensure that your lender knows exactly what your plan is and how you plan to repay your back amount owed.
• Another thing you can do is see if your lender will let you skip a couple of monthly payments now and put them on the end of your loan, or re-amortize your mortgage.  This option is only for short term financial crises and you may still be required to pay something toward your mortgage in the mean time.
• Look into refinancing if you have some equity in your home, so that you can have a lower monthly payment that you won’t be struggling to pay each month.
• If you’re looking at a long term financial crisis, such as a layoff and want to stop the possibility of a foreclosure, you should consider a loan modification, which can change the terms of your loan, or stretch the term of the loan out a little more so that you can afford to keep your home and make your payments on time, even without your job.

These are the ways to stop foreclosure, by attacking the problem before it begins and making sure to stay in contact with your lender at all times so they are aware of your efforts to ensure that you are not faced with a foreclosure in your future.  Lenders want to help if you will let them and even though sometimes your customer service representatives may not be able to help you, a supervisor probably can either help you or can refer you to someone who works with your lender who can help you to stop foreclosure.  

To lower your rate, remove your late payments and stop foreclosure, contact a professional today. You can <a href=”http://www.pacethyself.com”>Stop a Foreclosure</a> on your home. 

Jane Anthony
http://www.articlesbase.com/mortgage-articles/save-your-home-by-stopping-foreclosure-741109.html

Taking responsibility for the role you played. Now do not get me wrong here, I am not saying that your foreclosure is your fault. But what I am saying is that you need to take a look at how your foreclosure procedure developed and be honest with yourself about how your actions contributed to it.

I fully realize that my choice to move out of my home and let it sink into foreclosure was a stupid one. I also realize that there was a cost associated with that. A rather large and expensive one in my case because I decided to move back into the house and save it from foreclosure rather than letting it go. I paid a significant amount of money in fees and made some tough choices. I fully accept responsibility for my choice.

What choices did you make that contributed to your foreclosure? I know this is not an easy one and it can feel downright uncomfortable but if you want to stop your foreclosure procedure, think about this and be honest with yourself.

Being financially responsible. In an instant gratification kind of society like we live in, financial responsibility seems to have taken a back seat. Saving money and developing proper budgets to live on is not something popular or trendy. But if you want to stop your foreclosure procedure, you will need to take financial responsibility for your life. This means developing a budget that you can live with and a budget that is within your means. This also means tracking your money every month so that you know where it is going. The amount of money that you spend on stuff that you really do not need might surprise you.

Taking responsible action with your mortgage company. This means talking to them and trying to workout a solution to your foreclosure with them. Your foreclosure procedure will move forward whether you talk to your mortgage company or not. The responsible choice is the one where you choose to try to work with them. And if they refuse to work with you, the responsible choice is seeking help to deal with your mortgage company.

Jill Borash
http://www.articlesbase.com/mortgage-articles/being-responsible-in-your-foreclosure-procedure-736934.html