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Loan Modification Program Making Home Affordable Helping Foreclosure Issue?

Posted on | November 10, 2009 | 1 Comment

This morning we got some interesting data when it comes to the loan modification program Making Home Affordable. The information that we did not get is how many home owners are actually keeping up with the payments of their new modified loans. We saw that there have been 650,000 borrowers who have modified their home loans but how many of them are current on their payments?

The absence of this data makes us very skeptical. If this number was impressive there is little doubt that the Treasury would make sure that it is headline news. Diana Olick of CNBC reports that foreclosure inventories continue to rise. This is very bad news for the overall housing market and economy. The September foreclosure rate was 3.12% which was a month over month increase of 2.6% and a year over year increase of 88.9%. This is quite disturbing to know that foreclosures have almost doubled in the last year.

In the Realty Check by Diana Olick she has some very interesting comments from Howard Glaser; “What I am most worried about is March and April of next year.  What happens to a housing market that seems like it is finding its footing at that point?  Because several things will happen simultaneously:  You’ve got the option ARM resets beginning to kick in, you have the home buyer tax credit expiring, maybe for  real that time, and you have the Federal Reserve maybe running out of money to buy mortgage-backed securities. If we add on top of that, banks beginning to release some of this inventory ,which they have been holding on to for a long time, those three items are potentially very destabilizing to the  marketplace.   So I’m concerned.  I think buckle your seatbelts for Spring of next year.”

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Author: Jesse Wojdylo

Category: Current News

Comments

One Response to “Loan Modification Program Making Home Affordable Helping Foreclosure Issue?”

  1. Darius Wells
    November 12th, 2009 @ 2:34 pm

    Most homeowners that get a loan modification still end up behind and needs another modification.

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