Will the Barack Obama Foreclosure Initiative Achieve Its Goals?

The crux of he foreclosure avoidance plan of the President is to obtain $75 billion from the funds that have been earmarked by Congress for bailing out the financial services industry and use it instead to combat the rising number of foreclosures.  The Barack Obama foreclosure prevention initiative has three primary components and these are refinancing, loan modification, and the stimulation of more home loans.

The President wants to help borrowers who are underwater in the mortgage loans to obtain refinancing from the banks and in the process make their monthly payments more affordable.  Qualification for this particular component of the Barack Obama foreclosure avoidance initiative is to have a loan balance that is not more than 105 percent of the current value of the borrower’s home.  Meanwhile, the second component is geared towards encouraging the banks to give the go signal for loan modification applications to make the monthly payments more affordable by not exceeding 31 percent of the borrower’s monthly salary. 

The Barack Obama foreclosure prevention initiative, which is better known as the Making Home Affordable Program, has made a slight progress in its attempts to assist borrowers in their efforts to get out of the foreclosure trap in the face of decreasing home values and rising unemployment rates.  As of the last week of September 2009, it is believed that the President’s program has finally achieved some results.  Some argue that the Barack Obama foreclosure avoidance plan has been instrumental in the slight improvement in the foreclosure rates in some states and in the fact that home prices have stopped declining in a number of states.  Nevertheless, many people still point out that only a slight percentage of those who should have qualified for home loan modifications have gotten the approval of banks.

Some have criticized the Barack Obama foreclosure prevention initiative for it naivety and not being founded on sound economic principles.  Nevertheless, the Obama Administration continues to have faith in the program and has been issuing reports on its progress.  The government has proudly reported during the first week of October 2009 that the plan has accomplished a milestone that has been originally projected for the first week of November 2009.  Apparently, the plan’s goal of having more than half a million trial loan modifications approved has become a reality almost one month ahead of projections.  It is therefore too early to disregard the Barack Obama foreclosure prevention program and call it a failure. To learn more about the foreclosure process stop by http://rismedia.com