The Obama foreclosure prevention home loan modification program has offered governmental assistance to homeowners who face foreclosure as a result of economic hardships, unemployment, and even underwater home loans which all lead to homeowners being unable to afford their monthly mortgage payment in many cases. Major mortgage servicers across the nation have participated in the Making Home Affordable Program and, despite recent criticism, there was an increase in the overall number of permanent home loan modifications made in 2010.
The Making Home Affordable Program also offered an outline to various servicers in how they could implement proprietary home modification programs as an alternative to federal foreclosure prevention initiatives. It’s believed that homeowners who have been able to acquire these modifications have been able to avoid the loss of their homes even when economic hardship and personal financial distress was present, yet there have been some critics who feel these mortgage modification initiatives need to be stopped.
A report from International Business Times made mention of statements by Rep. Randy Neugebauer who indicated that federal foreclosure prevention efforts are actually hurting the housing market as it does not allow the market to bottom out and begin to repair. Obviously, there are those who disagree with this sentiment, but Rep. Neugebauer stated that federal assistance plans like the home loan modification program are simply, in some cases, delaying the inevitable foreclosure that some homeowners will face and he believes that by ending these assistance initiatives, homeowners who will be able to keep their home in the long-term will do so.
While, again, there are those who both agree with and disagree with these statements as homeowners are seeing problems within the home loan modification program along with success rates as well. Understandably, home loan modifications have not been perfect but have allowed for numerous individuals to acquire a more affordable monthly mortgage payment which has allowed them to prevent the loss of their home while they gain a more stable financial situation and foundation from which they can continue meeting their mortgage obligations.
Yet, critics of the Making Home Affordable Program often point out that redefaulting is an issue that many homeowners face and, as a result, there are foreclosure prevention efforts which do simply delay the inevitable. There are homeowners who simply cannot afford their mortgage payment even when a modification plan is in place, but initiatives like the Unemployment Program are also said to be delaying homeowner foreclosure in cases where little can be done to save a homeowner’s property.
As an example, the forbearance option from the Unemployment Program allows a homeowner a minimum of three months where they do not have to meet their mortgage payment where unemployment is a problem, but long-term unemployment issues have caused many to still be without a source of income after this forbearance period has ended. However, these foreclosure prevention efforts through modifications and extensions are still in place from both federal sources and directly from many major banks. While, again, they have not been perfect, homeowners do still have these options when seeking foreclosure prevention and more affordability on their home loan.