The Making Home Affordable Program, which is the official name of the Barack Obama foreclosure plan, has had mixed results in its efforts to prevent foreclosure for many homeowners in the face high unemployment rates and declining home values. Some contend that the President’s program has made some inroads according to statistics reported during the last week of September 2009. Specifically, the Barack Obama foreclosure plan is believed to be the reason for the slow down in the slide in housing prices and the slight reduction in the foreclosure rate in some states. However, many people still criticize the government’s program because only a small percentage of the homeowners who are qualified for loan modifications have been accepted into the program.
The core of the President’s plan is to take $75 billion from the bailout funds that have been approved by Congress for the financial industry and use that to help homeowners remain in their homes. The Barack Obama foreclosure plan has three main components and these are refinancing, loan modification, and more home loans. The first component is designed to help homeowners who are underwater to obtain refinancing for their home loans to make their monthly payments more affordable. For a person to be eligible under this component of the Barack Obama foreclosure plan, the loan amount that is not yet paid should not exceed 105 percent of the current value of the house.
The second component of this government initiative is designed to encourage banks to grant homeowners a loan modification to reduce their monthly payments so that they will not exceed 31 percent of the monthly income. Lastly, the Barack Obama foreclosure plan wants Freddie Mac and Fannie Mae to offer more home loans and therefore has provided these two organizations with $200 billion.
Critics have lambasted the Barack Obama foreclosure plan for not being founded on sound economic principles and for being naive. However, the federal government remains optimistic about the plan and has been issuing updates on its progress. The US Department of the Treasury and the US Department of Housing and Urban Development have revealed during the first week of October 2009 that the plan has achieved a milestone that has been projected for November 1, 2009. They pointed out that the plan’s goal of more than half a million trial loan modifications has been reached almost one month ahead of schedule. Thus, only time will tell whether the Barack Obama foreclosure plan is really capable of helping out the thousands of homeowners who are on the verge of foreclosure. For more information and foreclosure news click here.