Recently President Barack Obama unveiled an all-inclusive strategy to address the housing crisis and assist the millions of American families who are suffering financially from the current economic recession. The $ 75 billion strategy should reduce foreclosures through refinancing, loan modification, and other forms of assistance.

 

Under this plan, one element is refinancing where your current lender can offer you a Fannie Mae or Freddie Mac backed loan with a lower interest rate. There are two key requirements to qualify for this program, one is occupancy and the other is proof of income. This program is designed to help people whose homes have depreciated in value and ineligible for regular refinancing due to lack of equity.

 

There is also a reward system designed for those who have kept up with paying their mortgage payment. It reduces the possibility of a paying borrower walking away from a bad mortgage.

 

The loan modification process allows the borrower, with the assistance of a load modification attorney, to negotiate better loan terms with the borrowing bank so that they can better afford payments. Millions of loan modifications were granted last year; however the new terms meant that delinquent borrowers would remain delinquent after loan medication, often resulting in second defaults.

 

Regardless if you agree or disagree with the current administrations posture of bailing out corporate America and individuals; the main question is does this work? With billions of dollars given to the banks, we find that lending is still extremely hard to obtain for qualified candidates seeking a loan. If we are assisting those in default what are we doing about the banks to jump start lending once again. The real estate market is being clogged with excess inventory partially because banks are not lending.

 

Do you think this new program will help those in trouble and what are your thoughts on the current lending practices of banks who have received government funds?