subject: Stop Foreclosure: Is The Government Mortgage Modification Program Working? [print this page] Depending on who you ask, the administration's "Making Home Affordable" foreclosure prevention program may be working; then again, it may not be.
Current statistics show that the program has helped about 500,000 homeowners modify their mortgages. It decreases their monthly mortgage payments, allowing them to hang onto their homes.
When you consider that the program was supposed to help 4 million homeowners, critics say that it hasn't come close to doing the job it was supposed tod. And, there's a larger worry, ie, that . . .
More Home Foreclosures On the Way: Some Predict As Many as 12 Million
According to the October 9th BusinessWeek article, "Home-Foreclosure Rescue Is Falling Short, Critics Say," ". . . the [Making Homes Affordable] program may barely dent the crisis. Indeed, with estimates that the economic crisis will force as many as 12 million homes into foreclosure, it may not prove enough . . ."
If this is true, then home foreclosures will continue to escalate.
Why Housing Experts Believe Home Foreclosures Will Continue to Rise
In short, "It's the economy, stupid," to borrow a phrase from an old Bill Clinton presidential campaign.
To explain, when the home foreclosure crisis started, it was primarily due to mortgage fraud and/or subprime mortgages (eg, future homeowners being put into mortgages they could not afford).
Now, however, the reason that people are losing their homes has shift . . . to unemployment.
Homeowners are losing their jobs in record numbers. Consequently, many of them are no longer able to afford their mortgage payments.
Hence, it's no longer about mortgage fraud and unqualified buyers with subprime mortgages. It's the "average Jane and Joe with previously good credit" who are losing homes now.
And, while the economy seems to be on the road to recovery, it's a slow one. Not to mention that many of the jobs that were lost are not coming back because many were in dying sectors (eg, manufacturing).
Hence, we're stuck with home foreclosures for a while . . . unfortunately. This makes foreclosure cleaning an excellent business to start, especially right now.
by: Yuwanda Black
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