A record number of households were threatened by foreclosure in 2009. According to Realtytrac Inc, an estimated 2.8 million households across the nation were in jeopardy of being foreclosed on. These figures show a rise of more than 20% from 2008. Realtytrac is expecting another record number of households facing possible foreclosure in 2010.
Currently home prices are down and are expected to drop more before winter is over. Nationally home prices are down 30% when compared to the peak home prices of 2006. A large portion of low-priced foreclosures being sold, account for falling home values across the nation.
The foreclosure figures for 2009 show us that so far Obama’s mortgage relief plan has not lived up to expectation. The plan was unveiled in February of 2008 and as of December only late 500 of the 900,000 homeowners were in the making Home Affordable program have received a permanent home loan modification.
Mack Zandi, the chief economist of Moody’s Economy.com predicts that only around 750,000 homeowners might actually complete the application process, which is a small fraction of the 3 to 4 million homeowners that the Making Home Affordable program originally projected to help.
The plan was designed to help make payments more affordable for borrowers that are having trouble paying their mortgage.
The Making Home Affordable program often includes a longer repayment period and a lower interest rate. The loan modifications reduce monthly payments by an average of $500.
These modifications are temporary, but are supposed to become permanent once three consecutive payments are made on time during the temporary modification trial. Along with the record of on time payments and a proof of income and other required paper works before the loan modification becomes permanent.
The Treasury department reported that, only late 500 borrowers or 7% of those that are signed up for the loan modification program have received permanent loan modifications as of December.
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I guess I should stop expecting a big turnaround. It seems like every time a new program is launched to help the economy, it ends up backing it down again. Here’s to hoping that things will get better by the end 2010.