Homeowners Still in Need

Posted on March 27th, 2008 by saman

Consumers in danger of losing their homes to foreclosure are still not receiving adequate help. With the Bear Stearns deal, we can see that the legislature needs to act much quicker when it comes to modifying bad loans. Experts say that reducing foreclosures should be of the utmost priority because foreclosures and defaults are the main reason for the current housing crisis.

Many believe that the solution to the current economic problems is not addressing individual financial institutions. They say that there needs to be concentrated focus the quality of institutional holdings.

Many financial institutions are being assisted but the problem of the quality of housing and the assets attached to it are deteriorating while we wait for a decent solution to the foreclosure problem. Many are bothered by what seems to be like the administration’s focus on helping Wall Street rather than the homeowner.

The prices of home fell almost nine percent last year. This is the largest drop of home prices in twenty years. Filings of foreclosure have increased by sixty percent last month. Increased foreclosures are predicted.

It is fortunate that there are currently some programs available that will assist homeowners in distress. There are the programs such as FHASecure and Hope Now. FHA secure is limited because of certain requirements for eligibility. Hope Now is strictly voluntary. Programs such as these are limited in their impact and stronger, legislation is needed if there is any hope of slowing or stopping the current foreclosure problem. Some lawmakers believe that the problem will naturally get back to normal but that does not help the thousands of homeowners who have already lost their homes. Homeowners continue to be distressed while Congress is still deciding on what to do. Unfortunately there is the belief that the numerous foreclosures are happening because people are not making the proper decisions. This is hardly the case.

A plan has been offered in congress that would allow the FHA to guarantee and insure mortgages that are refinanced and written down by lenders and those who are holders of mortgages. This plan could assist in refinancing almost two million in loans for borrowers who are at risk.

Another plan being considered is one called “HELP Now”. This is a three-year plan which would have the Treasury department purchasing loans at a deep discount. Loan pools that are bough by the government would be modified and discounted with low interest rates and principals. They would be sold to the private market.

Though these programs may appear to be helping homeowners who are being faced with foreclosure, some will mainly be beneficial to banks and lenders of poor mortgage debt.. These institutions could earn large amounts of money and it would be at the expense of the taxpayer.

Moderate and low income individuals have previously been pushed to buy houses that were overpriced with very bad mortgages. Even with this reality, many politicians do not realize that owning a home is not a good idea for some people. It doesn’t matter how much they are buying it for.