The Obama foreclosure rescue strategy makes sure that there are more new loans available in the housing market, recommends the approval of more loan refinancing applications, and stimulates an increase in the number of permitted loan modifications by banks and lenders.  The Helping Families Save Their Homes Act, which was signed into law by the President himself in May 2009, supports the foreclosure initiative.  This legislation was designed to make some adjustments to the Hope for Homeowners Act that was then given the goal of aiding borrowers who had outstanding mortgage loans with values that were more than the selling prices of their homes.

One of the main factors in the Obama foreclosure rescue plan is to assist borrowers in their endeavor to obtain the permission of their lenders to refinance their loans to help them avoid the foreclosure trap through the reduction of their monthly installments to make them more affordable.  To become eligible for participation in the program, the outstanding loan amount of the borrower should not surpass the prevailing market price of his home by more than five percent.  Another ingredient of the Obama plan is the offer of a bonus to a lender every time a loan modification application is allowed such that the monthly installments will no longer go beyond 31 percent of the monthly pay of the borrower.  The Obama foreclosure rescue strategy also helps Fannie Mae and Freddie Mac offer more new home loans by infusing more capital into these two corporations.

But statistics gathered during the month of September 2009 did not speak well for the Obama plan because it failed to have a substantial influence on foreclosures and home prices.  Those who were against the plan quickly capitalized on the observation and claimed that it had little chance of succeeding because of its deficiencies.  But those who are in favor of the Obama foreclosure rescue strategy pointed to several positive results.  The plan is believed to have put a stop to the decline in home market values and the rise in the foreclosure rate in a number of states.  But those who do not favor the President’s program were not satisfied, pointing to the small number of approvals for loan modifications despite the large number of homeowners that should have qualified.  Also, some critics of the Obama foreclosure rescue plan have criticized the lack of a strong economic basis.  But the Obama Administration continues to support the program and has claimed that a milestone was achieved when more than 500,000 applications for loan modifications were approved. More details can be found at http://www.bestforeclosurenews.com

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