According to an article in the Dallas Morning News, the Obama administration kicked off the new "Making Home Affordable" initiative today. The program is designed to help 9 million homeowners avoid foreclosure
The article said:
The administration, launching what it calls the "Making Home Affordable" initiative, said that borrowers will have to provide their most recent tax return and two pay stubs, as well as an "affidavit of financial hardship" to qualify for the $75 billion loan modification program, which runs through 2012.
Borrowers are only allowed to have their loans modified once, and the program only applies for loans made on Jan. 1 2009 or earlier. Up to 4 million borrowers are expected to qualify. Mortgages for single-family properties that are worth more than $729,750 are excluded.
This program is a first step in the right director to curb foreclosures nationwide. But once again we need to have tight oversight on this program to assure that the mortgage modifications are truly affordable and prevent foreclosure in the long-term. As the numbers have shown us, many of the past modification programs have failed to stop the increasing numbers of foreclosures because the modified loans are not affordable. Many homeowners facing foreclosure are not just behind on their mortgage payments, they are also swamped with credit card debt or other types of debt which are sinking them fast. Many of the homeowners facing foreclosure need to receive debt forgiveness on their other debt in order to fully benefit from this mortgage modification program. This is why it is important for homeowners facing foreclosure to look at their full financial picture before settling on a mortgage modification program. How much debt do you owe? How much money do you have left after paying your debt obligations? If your home modification is approved will you have enough money to pay your other expenses and your debt? Many homeowners don't just face foreclosure, they also face wage garnishments , bank account seizures and need bankruptcy to help them sort through their financial crisis. The Obama administration needs to take action now to assure that those homeowners who need help also have access to the bankruptcy courts to modify their loans and clear unsecured debt so that they can get a financial fresh start.