CNBC On Obama Loan Mod Program

Obama “Making Home Affordable”

Obama Speaks on Loan Modification

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.

Is The Obama Program Working?

It’s been nearly three months since the Obama Administration rolled out “Making Home Affordable”, a plan intended to help distressed homeowners. But, what’s happening? It looks like the jury is still out. Amid all the hype, is the plan living up to its expectations? Thus far, only 55,000 homeowners have been helped, a far cry from the Administration’s goal of seven to nine million.

Even more disturbing, the foreclosure crisis seems to be worsening:

• According to RealtyTrac, a company that compiles foreclosure data, reports that 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. It is also the second consecutive month in which more than 300,000 households got a foreclosure filing.

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

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

While the Obama Administration should be commended for taking a proactive approach by promoting loan modification as a tool to prevent foreclosure, more needs to be done and the administration needs to be honest with the American people about who can realistically be helped with ‘Making Home Affordable’.

There does seem to be some hope. Good news came out yesterday. Citibank, Chase, WAMU and EMC announced they will no longer require homeowners to be late on their mortgages to qualify for loan modification.

I’ve also developed the only truly free online loan modification course. The course is seven lessons and covers all aspects of the loan modification process.

The program is not only good for distressed homeowners, but realtors and CPAs who want to learn more about loan modification. The only requirement to participate is the completion of a brief, one page application, at which point you’ll be immediately provided with a username and password with access to the full loan modification program.

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!