OBAMA’S RESCUE PLAN FOR TOP FORECLOSURE STATES – WILL IT WORK?

Federal help for hardest-hit foreclosure states

On Feb. 20, National Public Radio reported President Barack Obama’s plan to rescue five states that are heavily affected by home foreclosures: Nevada, California, Arizona, Michigan and Florida.

Obama’s plan includes doling out $1.5 Billion in federal aid to state and local housing agencies to help keep homeowners in their homes via loan modifications.

Wow, how much more taxpayer money will be withdrawn to save the economy?

The key is to use the money wisely. How? Use the money to hire more trained staff to answer phones, process paperwork and handle customer applications and questions.

I’ve had many conversations with homeowners who cannot get anyone from the state housing agencies to get back in touch with them. They get frustrated, helpless, hopeless and foreclosed on even if they have a legitimate hardship and are good candidates for loan modifications.

On top of hiring trained workers to process customer loan modification applications, the government should apply enough pressure to make the lenders APPROVE loan modifications at terms that would benefit the homeowner long-term. If loans were modified within one to two months, rather than the lengthy process that is more common among banks currently, we would not have a glut of loan modification requests and the housing market would recover faster.

The full NPR article is here: http://www.npr.org/templates/story/story.php?storyId=123897602&sc=emaf

— On Sun, 2/21/10, Maria Hass wrote: