CA Mortgage News- Obama Mortgage Relief Program Fails
By: Kathryn Davis
Now it should come to no one as a surprise that in today’s news it was reported that the Obama Mortgage Relief Program failed to deliver. (Big surprise!)
When they announced in the beginning that this would help about 3 millions American’s many of us in the business where skeptical. We were right to be. Only a fraction of that amount has actually been helped, now you have to remember also that ½ of the loan mods done last year re-defaulted. So the true amount of successful Mortgage Relief is much smaller. And on top of that the newest trend the past 6 or so months is that mortgage lenders will give homeowners hope by getting them into a trial modification plan promising that they should just “roll over” into a permanent modification at the end of the trial which is about 3 months.
If we continue to have such disparaging reports of successful loan modifications then we will continue to have a flood of foreclosures. What little housing market rebound we started to have last year will be crushed by the amount of rising foreclosures. Now I read today that the amount of new foreclosures diminished last month, but I suspect that won’t last for long. It is predicted that the amount of new foreclosures will exceed last years which exceeded 2008 and so on.
Homeowners facing foreclosure can not count on a loan modification to save them. The reality of successful loan modifications is very dire. I personally have worked loan modifications and they are very difficult with the lies and games the mortgage lenders play its as if they are trying to get the homeowner or modification company to give up in frustration only to disqualify them at the end for some flimsy reason. Homeowners are often better off doing a short sale and buying a new house at a much lower price that will actually build equity rather than try to save a sinking ship in their existing home.
What does this mean for California residents? Well You can bet that hard hit areas like San Bernardino, Stockton, Merced, Sacramento, Riverside Counties will be greatly affected. Orange County and Los Angeles counties are more stable and more desirable counties as they are more metropolitan and closer to popular beaches and attractions. However I believe that this could be felt all across the California.
Until someone comes up with a real program that actually helps homeowners stay in their homes we will continue to see foreclosures on the rise in our neighborhoods.