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Mortgage Loan Crisis: Is it a help or hindrance to Homeowners

There’s several new government programs that are geared to help homeowners in foreclosure, the Project Lifeline and Hope Now, these programs are there to assist homeowners who are endanger of losing.

Over the past 2 years the media has informed homeowners that it may be best to consult with their mortgage lender for assistance. Though these programs are geared to assistance homeowners in danger of losing their, for those who lost their homes to foreclosure, financial hardship or poor lending; prior to the programs startup, there is no assistance with regaining their properties through these programs. Nevertheless, some of these same people added to the rise of these programs, these people who have lost their homes convinced Congress that foreclosures were developing into a bigger problem, a problem that needed to be addressed immediately.

Although, it took lawmakers over six months to create these plans, which pushed homeowners further into foreclosure. For any homeowner to put their faith in these programs it may not be a good idea. The only banks that are involved in these programs are Bank of America, Chase, Wells Fargo, Country Wide and WaMu, all volunteered to help homeowners behind in their mortgage payments or to stop foreclosure establish modification program. Not all mortgage lenders as you can see are involved, this makes the program less effective and those participating lenders can help compose a payment plan or adjust loan terms, stop the foreclosure process for month or so, or the sheriff sale of a home.

A homeowner being a part of the any of these programs will not considerably change the way they do business, and only the current media coverage of these programs will inform homeowners of these programs. All lenders have a mitigation and foreclosure section; most homeowners are not aware of this nor do they use the resources their lenders offer. Which lead many homeowners to refinance, give up or sell their homes, rather than, working with the lender to see if they may be eligible for a remedy through their lenders mitigation department. These programs have not changed anything nor have they created solutions to the foreclosure crisis, which has left most homeowners and critics scratching their heads.
Those homeowners who can’t workout their housing issue with their lenders or who do not meet the criteria, unfortunately there is no further assistance from the government programs than they could have found in their nonexistence. If a homeowners has lost their homes prior to the government programs begin, these programs will not assist them with getting their homes back after foreclosure. There are several ways for homeowners reclaim their homes after foreclosure, and it has nothing to do with the current government plans. Those homeowners who lost their homes through foreclosure without assistance from any of the government programs, would have more than likely still have lost their homes, through the government-sponsored programs. As stated before these programs are voluntary for the banks, and not all banks are a part of the programs and most banks can do the same thing as the programs offers without intervention by the government. Critics feel that no matter what the Government does to alleviate the suffering of millions of homeowners, this crisis rages on.

Despite all of the chaos from homeowners concerning this crisis has still left homeowners fending for themselves. This crisis continue to worsen some feel that mortgage lenders are undermining, the idea of the foreclosure bailout publicized by the Government, elevating the credit requirements for mortgages nor are banks refinancing homeowners who have troubled loans as intended. Since program started there have been several new requirements and restrictions of homeowners who request modification of their loans and refinancing in order to avoid foreclosure. The rise of the current credit ratings is one of the new requirements, rating have been raised from 720 to as high as 760 and even 780, some economist say that this is clearly sabotage.

Those homeowners who are in trouble have lower credit scores rather than A one credit, which leave you to wonder how borrowers can accomplish something if this program applies to those who have not credit issues. Those homeowners with a considerable amount of equity in their homes but yet are having trouble making their monthly payments are being denied by lenders; and those who took those crazy interest only loans that have increased since their origination are denied also

Within the last year those homeowners who are applying for refinancing has more than doubled in the last year, where only 25% of those who do apply obtain those loans. The majority of these loans are not being granted at low interest rate, if there is even a small blemish on your report, which has resulted in raising interest rates for those loans that are approved. The next bailout will be among the commercial real estate sector, due to the decline in property values. Not added to the bailout plan are the jumbo mortgages, these are due to start sometime within the next few months, which proves that the current state of the housing will not be improving anytime soon.

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