Re-Modified Foreclosures are Troubled Once More

Around fifty percent of the foreclosure cases that were filed for modification during the first half of 2008 are now in non-payment status again. The modifications were supposed to help these borrowers keep their homes. But due to either the continued economic slump or the still unaffordable adjustments foreclosure still looms to them

The economy has been falling further reaching the end of 2008. One in every 10 mortgages is now either in foreclosure or delayed in payment. 500,000 lost their jobs last November making unemployment rate peak at 6.7 percent. Credit markets only showed some improvement thanks to the $700 billion bail out approved by the Congress.

The different government areas have diverse plans in trying to keep the foreclosure-troubled in their homes. Here are a few:

• Office of Thrift Supervision director John Reich thinks that government fund must be directed in building more work opportunities than using it to prevent foreclosures. He thinks that more paying-jobs for the currently unemployed will give room to pay for mortgages thereby preventing foreclosure.
• Some experts, like Federal Deposit Insurance Corp chairman Sheila Bair thinks that loan modifications are not modified enough to be affordable.
• The government wants to focus on the how big their action should be in trying to stop the increase of the already 2.25 million cases of foreclosure for 2008.
• New Jersey Gov. Jon Corzine sees a bottom-up approach by modifying loans and helping homeowners keep their homes. He wants a 3-6 month freeze in foreclosures.
• President-elect Barack Obama intends to include aiding homeowners facing repossession with their mortgages in his great plan for the recovery.
• The Bush administration relied on voluntary efforts by the lenders to hopefully stop foreclosure which as we have seen was not that helpful.
• A lot of consumer advocates and lawmakers found that tanks started a government reaction. They hope to have the same effect as the Home Owners Loan Corp of the 1933 depression.

Source: Foreclosure Deals