Some people believe that so far, the results of the Obama Foreclosure Bailout initiative have been unconvincing in its goal of providing assistance to homeowners  in the face of more and more layoffs and the continuing slump in home prices. Foreclosure news just continues to dominate in this eroding economy. Some argue that the initiative of the President has a number of positive outcomes in the housing market and in the conditions of homeowners.  In particular, Obama Foreclosure Bailout plan is believed to be the reason for the deceleration in the slide in housing values and the slight reduction in the foreclosure rates in several states.  However, many people have observed that only a small fraction of the borrowers who should have been qualified for the loan modifications have actually been allowed to benefit from the plan.

It is important to point out here that the heart of the President’s initiative is to transfer some of the funds that have been set aside by US Congress to save the distressed financial services industry to the program for reducing foreclosures. Getting help with foreclosure remains a high priority for many people. The three key objectives of the Obama Foreclosure Bailout  program are the provision of more loan modifications, new home loans, and loan refinancing.  The first portion of the plan is designed to help homeowners who are underwater to obtain refinancing for their home loans to make their monthly payments more affordable.  To be eligible under the Obama Foreclosure Bailout plan, the remaining unpaid loan value should not be greater than 105 percent of the current price of the home.  Secondly, the initiative has to do with helping the homeowners obtain loan modifications so that their monthly mortgage payments will not exceed 31 percent of their monthly salaries.  The Obama Foreclosure Bailout program has also set aside 0 billion for Fannie Mae and Freddie Mac to encourage the approval of more new home loans.

A criticism that has been made by some people against the Obama Foreclosure Bailout plan is that it is not justified by sound economic principles.  Nevertheless, members of the Obama Administration continue to support the program and are relentless in their efforts to inform the public about its progress. Note: when researching foreclosure information online, be sure to search for forecloser as well as it is a very common miss spelling. To demonstrate, the Housing and Urban Development and the Treasury Departments have declared that the program has attained a milestone even before its projected date of accomplishment.  They reported that more than 500,000 trial loan modifications have been issued approximately one month ahead of schedule.  Critics are therefore too hasty in their judgment of the plan to help homeowners who are threatened by the possibility of foreclosure.

Nationwide headlines are continued to be dominated by foreclosure news and the increasing rate of unemployment.  Reports say that almost 6% of homeowners are either in the rears on payments or at the cusp of foreclosure.  In comparison to a year ago, this number has doubled.  According to the Mortgage Bankers Association, it is very alarming to see that the rate of troubled homeowners have doubled in the past year.

In April, 342,000 properties in the US were foreclosed.  California posted 96,500 of the total foreclosures of the country.  This data is according to a web-based company, RealtyTrac.  Reportedly more than 600,000 senior citizens are also either delinquent or have already been foreclosed on.  AARP reports that older Americans, the ones that have subprime first mortgages, are 17 times more likely to have their homes foreclosed than Americans, of the same age, having prime loans.

The community is dramatically impacted by subprime loans and their much increased rate of foreclosure.  A study showed that in areas where subprime loans are prevalent, the number of foreclosure filings is also high.  The foreclosure news seems to dominate the airways and subprime loans account for nearly 50 percent of those cases.

Researchers tried to study other factors which could affect the number of foreclosures in an area.  They considered home value, race and income but arrived at a conclusion that subprime lending is the major factor for foreclosures.  Not surprisingly, one factor that did repeatedly impact the rate of foreclosure was unemployment.  People don’t have enough income to keep up with their mortgage.  That’s why MS Foreclosure and other areas as well are skyrocketing.  This fact has lead agencies such as the Federal Reserve Bank of Boston to take up the cause of unemployed homeowners and recommend for more lenient policies in their behalf.

The sad truth is that there will still be many more Americans that will be affected by foreclosure in the coming months. (Note: When doing your research online make sure to search for ‘forecloser‘ as well as it is a very common miss-spelling.)  The government is trying to assist with various policies and legislation, but it is unclear on what impact it will have.  The biggest drawback of such policy changes, is that they take many months to be approved and applied.  Many Americans simply do not have that long to wait.

The big US housing boom really started to dwindle in 2006 and increasing foreclosure news has dominated the media ever since.  Many of today’s homeowner’s (maybe as much as 10% of them) simply cannot keep up with their payments.

Many of the foreclosed homes are tied to neighborhoods where subprime martgages were widespread.  MS Foreclosures are just one example. Unfortunately this has led to a decrease in home values as well which just adds fuel to the fire.  Add to that the fact that local government spending has also been cut way back because this decrease in home values has also resulted in a decrease in property taxes and their annual budgets.

There were signs of this coming however, three of them in fact.  The first sign was the massive bailout of home owners that came.  The second sign was all of the sub-prime loans and adjustable rate mortgages beginning to implode.  Lastly, the third sign has been the fact that even prime rate loan holders are losing their homes now due to job loss and the economic crisis.  Most of them even have good credit ratings.  Unemployment is now forecast to impact about 60 percent of all of the mortgage defaults.  Unfortunately, this means that even more foreclosure news will be heard through the rest of this year.

According to an analysis made by New York Times in February 2009 (data provided by First American Core Logic), the number of prime mortgages that have delinquent payments exceeded 1.5 million with loans totaling to $224 billion.  On the same month, delinquencies on subprime mortgages reached 1.65 million while the Alt-A loans rose to 836,000.  Shockingly over $717 billion in bad loans were on the books for February – up over 60 percent from the same time period a year ago.  All of these foreclosures have also dramatically impacted Wall Street and mortgage bonds.  These also lead to bank loses of hundreds of billions. (Note: Search on ‘forecloser‘ as well because it is a very common miss-spelling of foreclosure and is prevalent in the foreclosure news posts.)

The Obama administration announced in February that they will be spending $75 billion to save as much as four million homeowners from foreclosures through mortgage incentives and reduced payments.  The effects of this plan are expected to be felt in the next coming months.  Until then, we should brace ourselves for more foreclosure news that is looming in the neighborhood.