Has the Barack Obama Foreclosure Plan Accomplished What It Has Sought to Do?

The Making Home Affordable Program, which is the official name of the Barack Obama foreclosure plan, has had mixed results in its efforts to prevent foreclosure for many homeowners in the face high unemployment rates and declining home values.  Some contend that the President’s program has made some inroads according to statistics reported during the last week of September 2009.  Specifically, the Barack Obama foreclosure plan is believed to be the reason for the slow down in the slide in housing prices and the slight reduction in the foreclosure rate in some states.  However, there ares still some criticisms against the government’s efforts because only a few of the borrowers who should are eligible for the loan modifications have joined the program.

The core of the President’s plan is to take billion from the bailout funds that have been approved by Congress for the financial industry and use that to help homeowners remain in their homes.  The three primary parts of the Barack Obama foreclosure plan are the encouragement of refinancing, loan modifications, and the provision of more home loans.  The first part of the initiative has the goal of assisting borrowers whose unpaid loans are bigger than the current value of their homes to get refinancing to minimize their monthly payments.  For a person to be eligible under this component of the Barack Obama foreclosure plan, the loan amount that is not yet paid should not exceed 105 percent of the current value of the house.

The government initiative’s next component has the goal of encouraging the lenders to approve home loan modifications for homeowners to decrease their monthly payments to at most 31 percent of their monthly income.  The third part of the Barack Obama foreclosure plan is to encourage the provision of more home loans by providing 0 billion to Freddie Mac and Fannie Mae.

Many people have criticized the Barack Obama foreclosure plan for being unrealistic and not based on economic principles.  However, members of the federal government continue to support the plan and have been reporting on developments regarding the program.  The US Department of the Treasury and the US Department of Housing and Urban Development have revealed during the first week of October 2009 that the plan has achieved a milestone that has been projected for November 1, 2009.  They revealed that the target of more than 500,000 trial loan modifications has been achieved three weeks ahead of schedule.  Therefore, it is still too early to judge whether the Barack Obama foreclosure plan is a failure or not in its goal of preventing foreclosures. For more information and foreclosure news click here.