Is the Obama Administration Responsible for Foreclosure Surge?

I may catch a lot of heat for this blog, because after all, the Obama Administration has been taking a proactive approach to the foreclosure crisis, and I do believe in giving credit where credit is due.

But facts are facts, and the fact is the government has acted in cahoots with the lending industry to put the interests of the banks ahead of the interests of homeowners. They have cynically crafted an overly simplistic message which implies that governmental action has made obtaining a loan modification easier than getting an oil change!

Here are the talking points:

* The “Making Home Affordable” program will help the vast majority of distressed homeowners

* Free help from the government and lending institutions is easy to get and always better and more beneficial than hiring a professional to help negotiate a loan modification
But, the evidence simply contradicts the position of the government and the lending institutions. Foreclosures are not abating, and the problem is actually getting worse. Here are some of the facts:

* According to a report from the Federal Housing Finance Agency (FHFA), completed foreclosure sales increased 900% between March and April this year.

* According to RealtyTrac, a company that compiles foreclosure data, 342,000 households received at least one foreclosure-related notice last month. This is an increase of 32 percent compared with notices issued last April and is the second consecutive month in which more than 300,000 households got a foreclosure filing.

* According to the Wall Street Journal on April 15th, 2009, one the nation’s largest mortgage servicers, GMAC, acknowledged that only 10% of their customers facing foreclosure qualify for Obama’s “Making Home Affordable” program.

First hand, I’ve spoken to distressed homeowners who believed the hype, did what they thought was the right thing, and relied on free help from HUD counselors and/or Acorn to help them save their homes foreclosure. What was their reward for believing the government? They lost their homes!

The reason I created a free loan modification program is due in large part to much of this misinformation that has been spread by the government and the banking industry–not to mention the countless fraudelent loan modification companies. I believe that homeowners armed with knowledge about the intricacies of loan modification will be in a much stronger position to negotiate a loan modification that favors their interests over that of their lender.

Further, I do recognize and acknowledge that there is a place for paid loan modification programs. For many—if not most—distressed homeowners, I believe our free program can help them achieve a viable loan modification. However, every homeowner’s personal circumstances are unique, and some homeowners may benefit from the assistance of a paid professional. A good attorney specializing in loan modification may be able to help a homeowner negotiate better terms than they can on their own.

That being said, homeowners should be very cautious if they decide to hire a loan modification company or law firm, as many of these firms are inexperienced or worse, unethical. Homeowners should always check references and find companies with a track record of success.

Whatever a homeowner’s circumstances are, the place to start is with our free loan modification program. In this comprehensive program, homeowners will not only learn more about the “Making Home Affordable” program, but they will learn valuable tips and strategies on how to negotiate a loan modification. Likewise, should they still decide to hire a loan modification company, they will be in a stronger position to be able to identify a credible, ethical company, and protect themselves from the many unscrupulous loan modification companies out there trying to scam vulnerable homeowners.

Put Your Mind At Ease

You’re not alone. Millions of Americans are having troubles staying current on their mortgages.

The good news is that there is help available.

50% of Foreclosures Could Be Easily Prevented

Millions of Americans have been affected by the economy and the depressed housing market, creating a climate in which we’ve seen an unprecedented number of foreclosures.

Many homeowners have been affected by a job loss, divorce, a mortgage re-set, a mortgage re-cast, or any number of other potential factors that have made it difficult –if not impossible—to afford their mortgage.
With the economy in shambles, soaring unemployment, foreclosures are occurring at the highest rate in history and no one knows exactly when our economy will recover!

No wonder the only companies thriving in this economy are companies like McDonald’s, Wal-Mart, Anheuser-Busch and Pfizer!

But the reality is, most foreclosures can be prevented. While there’s no magic bullet, the most important thing a homeowner can do is….

Stay Positive and Stay in Touch!

Many borrowers are so overwhelmed by their financial situation that they stop staying in touch with their lender. This is a big mistake. Loan modification is getting easier to do with many (but not all) lenders, and with the Obama plan, many lenders have simplified the process.

Moreover, the banks have been under increasing pressure on banks to find every alternative to foreclosure for distressed homeowners. I have clients I’ve coached who just 3 months ago couldn’t get their bank to work with them, and now lenders have become much more cooperative.

While trying to keep up with one’s mortgage payments and the threat of foreclosure can create serious financial distress be emotionally draining, it is imperative to keep the channels of communication open.

As my title indicates, more than 50% of foreclosures could be prevented by staying in touch. The lesson is simple: STAY POSITIVE AND KEEP IN CONTACTl!