The "Hope for Homeowners" plan that took effect on October 1st of last year has been a HUGE disappointment to say the least. It was, in effect, a voluntary program for lenders to "write-down" mortgages (forgive part of the debt) and help keep people in their homes. The mortgage industry and the banks that are effected apparently were feeling bitter and not wanting to "volunteer" anything to delinquent borrowers. In fact, only 1 family was proven to have been helped by this bill....big surprise!
On May 20th, president Obama signed an improvement to this bill. It lowers the amount that banks need to "write-down", and it also offers lenders $1,000 for each loan it amends. While this is not startling, it is progress, and we need all the progress available to help the millions of families effected by the foreclosure crisis. Will it be enough to get banks off the sidelines and into the game of saving family homes? Will banks have the foresight to just take a small loss upfront instead of the huge cost of foreclosure? We will see.
My view is....more needs to be done. I will keep you posted as the results come in.
Matt
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