In response to the current economic crisis the federal government put forth a mortgage program that would free up financial assistance for struggling homeowners to help them renegotiate their home loans to help them avoid losing their homes. At least, that was the theory.
In reality, many homeowners who should be benefitting from Making Home Affordable Program are having problems getting their mortgages modified through their lender for a wide variety of reasons. It is estimated that only about one in eight of eligible homeowners are finding their way onto the program and the government would like to know why.
It has been reported that homeowners are finding difficulty with lenders who apparently don't know the basic facts of the program and don't seem to be particularly helpful to the clients and customers who they apparently work for. Part of the issue with the disconnect between lenders and homeowners is likely due to the urgency that many people are feeling from the immediacy of their financial situations while the foreclosure clock winds down on them; the barrage of homeowners in need has seemingly overrun a bank system that's trying to learn the ropes of a new system on the fly.
By the nature of the Making Home Affordable Program, homeowners living in homes worth up to $730,000 are supposed to be eligible to reduce their mortgage payments to 31% of their monthly income. The homeowners' homes are supposed to be safe from foreclosure while their loans are being assessed to see if they're eligible for the MHA program as well, which apparently isn't always the case. Another serious problem with this program is that banks are not actually required to modify a homeowner's mortgage even if they do qualify for the program and the program may actually not be in the bank's best interest as a business.
As it has been merely one month since the Obama administration started the publishing of series of monthly reports it's hard to say where the lenders are heading in their progression; whether they are striving to master the system or dupe the borrowers remains to be seen. There is not much in the way of overseeing going on between the Treasury Department and the lending institutions in regards to what seems to many homeowners to be deliberate foot dragging on the part of the lenders; unfortunately homeowners might be at the mercy of their lenders to take the initiative on their own to do a good job with this program.
Amerivest is a realty company based in southwest Florida, and specializes in Naples real estate. To view properties in the Port Royal real estate market, please visit us at NaplesGuru.com.
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