Newest Housing Nightmare: Obama WH Has Plans To Ban Foreclosures

By Ashley Jones on March 6, 2010, 6:00 am Posted in Economy News

While Fannie Mae and Freddie Mac frolic in the land of loans, reality is setting in. Hundreds of thousands of mortgages have been ordered to be modified by the Obama Administration. What did this do to Fannie and Mac? Well, Fannie’s 10k filing with the SEC reported the company lost $26.4 billion during 2009. They claimed this was due to the participation in the Obama Administration’s Home Affordable Modification Program (HAMP). Freddie’s 2009 report is not yet available.

President Obama To Fix The Foreclosure Crisis

To date, the President’s attempt to fix the foreclosure mess has not had much success. In fact, some experts agree it has put the housing market recovery at a risk. This is partially confirmed in the most recent report of new home sales. The report states the lowest level of sales since the first records were maintained back in 1963.

President Obama Wants To Fight Foreclosures

The President is thinking about banning legal actions against any home that has not had formal legal foreclosure notices started if it has not been reviewed by the Home Affordable Modification Program. This move would stop any lender from starting a new foreclosure unless HAMP had previously reviewed the loan package and determined it not to be salvageable.

HAMP can hold loans, even if they cannot be salvaged, for a long period of time. This presently would involve approximately two million, or more, delinquent borrowers. Eventually the bank might contact each home owner and tell them to contact HAMP. What incentive does the homeowner have to do this knowing that this might be the first step toward foreclosure? It seems that people in trouble of losing their home, via foreclosure, are not in any different shape today than they were a year ago.

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