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Will Foreclosure Help REALLY Help?

By
Real Estate Broker/Owner with Riede Real Estate, Lic. 01310792

Foreclosure of Sacramento HomesOn September 7, 2010, the Obama Administration implemented the long awaited help to struggling homeowners facing foreclosure. It's a plan that supposedly is to help at least 500,000 distressed homeowners throughout the U.S.

I wrote an article on Sacramento Real Estate Voice about this plan and how I thought it would help or NOT.

Does the Administration have a beat on the pulse of the struggling homeowner? Is California different from the rest of the Country? Is the Sacramento area that much more in distress than other parts of the United States? Did other states lose less equity and still have struggling homeowners that will qualify for refinance?

How much will it cost the tax payer to implement this new Administrative help? Is this just another plan that won't work?

Has the guideline for refinancing changed?  Will Lenders lower the mortgage balance by 10% or more?  Is 10% on a mortgage balance REALLY going to have an impact for the borrower? Will the borrower's home value be such that it qualifies for refinancing? Do you think lenders holding the mortgage will actually buy into this new plan?

Will the Administration when this fails, offer incentives to lenders to implement this plan on the back of the American Tax Payer?

These are all questions I have since I don't see any substance in the plan helping the Sacramento homeowner avoid foreclosure.

Check out the article, Will New Plan Help Stop Foreclosures I wrote and please give me your perspective in your State, City or County as to whether you think this plan through FHA will actually help homeowners avoid foreclosure.

 

Comments(6)

Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

I wouldn't worry about this particular plan very much.  It's voluntary and will probably not receive much interest from the lien holders.

So far, the government plans have been limited to helping people delay their return to renting.  Most would be better off if they would stop throwing everything they have at delaying the inevitable.  The tax credits were great for persuading everyone planning to buy in 2010 to do it before the end of April.  The credits helped nobody qualify to buy a home.  They did stimulate consumer hard goods a bit.  The housing industry's role in the credit?  Find people with a need to buy stuff, caught up on their bills, and not too far in debt.  Find people for the government who would spend the stimulus credit on the right stuff.

In short, the government has done nothing to help the housing market gain momentum.

Sep 11, 2010 04:13 AM
Troy Funk
Allison James Estates & Homes, Sarasota 941-957-3737 - Sarasota, FL
Broker / Associate

Good questions ... good answers.   I have never seen a better time to Buy, or a Real Estate Agent to become incredible successfull (in focusing on Short Sales).  

Sep 11, 2010 05:33 AM
William Johnson
Retired - La Jolla, CA
Retired

Hi Gena, I noticed that you posted and wanted to drop over and say Hi and that I don't think they have a clue how to stimulate the housing market much less how to help struggling homeowners. Certainly we have leaders and practitioners in our industry that might be able to help if that is what was actually wanted. While I am not in favor of returning to the past where breathing as the only criteria of successful borrowing, the rules and ordeal of securing financing has swung so far the other direction as to be discouraging many from moving forward when it needn't be. 

Sep 11, 2010 02:44 PM
Gena Riede
Riede Real Estate, Lic. 01310792 - Sacramento, CA
Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Mike, unfortunately I would tend to agree with you.  There certainly has been a lot of money spent implementing a lot of worthless programs that really haven't helped.  Not sure who is giving advice and what their credentials and/or experience with real estate is but I'd say it's not impressive!

Sep 12, 2010 12:31 PM
Gena Riede
Riede Real Estate, Lic. 01310792 - Sacramento, CA
Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

Troy, thanks.  Yes, Short Sales are the name of the game!

Sep 12, 2010 12:33 PM
Gena Riede
Riede Real Estate, Lic. 01310792 - Sacramento, CA
Real Estate Broker - Sacramento CA Real Estate (916) 417-2699

William, yep we certainly have swung to the other side and in the meantime as tax payers we are footing a lot of needless programs that are not functioning. It would appear that the government does not have a pulse on the needs of the struggling homeowner.

Sep 12, 2010 12:36 PM