Obama's Homeowners' Bailout: Is It Working?

In our series, Dispatches from the Displaced, HuffPost's Eyes & Ears has highlighted the stories of Americans who are facing foreclosure or who have already lost their homes. Through featuring reader-submitted stories, we have chronicled problems from unresponsive banks, to ballooning interest rates and fraudulent consulting services. Admittedly, the stories have been bleak.

But in March, many struggling homeowners breathed a sign of relief when the Obama Administration launched the Making Home Affordable program. Dubbed the "homeowners' bailout," the $75 billion program seeks to help 7 to 9 million homeowners avoid foreclosure through refinancing and loan modification. Since the program was unveiled in early March, mortgage services have offered to modify some 100,000 loans, although the Treasury Department was unable to say how many loans have actually been modified.

One loan servicer told the Huffington Post that following announcement of the program guidelines, they have reached out to 49,000 homeowners who they believe might qualify for a Home Affordable Modification under the Obama plan. So far, they have approved 1,300 modifications. That's less than 3% of the borrowers they've contacted, but they anticipate that 75% of the borrowers who apply could eventually be approved. The 4 to 5 million homeowners whom government officials estimate the project with help have until December 31, 2012 to file for a modification.

The Making Home Affordable plan is a bold step towards helping troubled homeowners, but it's no panacea. We have yet to see whether the program is a success for borrowers who have been approved for modifications. Under the terms of the program, a borrower's monthly payment is reduced to no more than 31% of their gross income, which can lower payments significantly. But the rest of the debt doesn't vanish, and five years later, interest rates can start creeping up again. These modified loans may prevent foreclosures now, but are they just prolonging the inevitable?

Are you one of the lucky few who has secured a loan modification through the Making Home Affordable plan? We're eager to hear your story. Is a loan modification keeping you from foreclosure, and is it a long-term solution for your finances? Please, email your story to [e-mail].

In the months to come, we will be highlighting stories of those who have been entered into a new mortgage under Making Home Affordable. Please sign up here to receive updates about the feature and to join HuffPost's Eyes&Ears citizen reporting unit.

Find out more about Dispatches from the Displaced, HuffPost's Eyes&Ears series of reader-submitted foreclosure stories.

Comments

[dianhow]

YES
As a Realtor- I've seen more first time buyers out there. Its the $ 8000. tax rebate that's doing it.
That program is working - give it more time. The GOP is of course, hoping and trying to make
us believe that it will FAIL ! GOP wants ONE thing to get POWER AND CONTROL BACK as they've
had for 20 years with Reagan - Bush SR - W Their policies have led us to disaster.
Repubs refuse to admit that . They take NO responsibility at all.
Many of us could respect them if they did- and promised to do better and to start representing average folks for a chang - not just big business - Corp America & WAll ST. .

[PhilipTaylor]

Let's have "OFF-THE-BOOKS" Accounting for ALL Americans - ENRON STYLE like the Wall Street Banks get:

1. Have a car payment - don"t worry put it "OFF-THE-BOOKS" to hide it when you go to the Bank for a loan.

2. Have a Second Mortgage - put it "OFF-THE-BOOKS" to hide it when you go to the Bank.

3. Have some Credit Card Debt - Simple, put it "OFF-THE-BOOKS" to hide it when you go to the Bank.

4. Have some student loans - don"t worry put them "OFF-THE-BOOKS"

Also, like Banks can do lets allow All Americans to ignore "MARK-TO-MARKET!"

Your house is worth $125,000 but you paid $250,000 don"t worry with "Mark-To-Market" Neutered you can say whatever you want to about your home value and no one can refute you!

Now when you go in for a loan, simply declare the house is worth $300,000 and along with your clean "ON-THE-BOOKS Balance Sheet" with no visible other debts means you get money from the FED at 1% interest or maybe less!

Why can"t this world be true for ALL AMERICANS like it is for Wall Street?

We do not own Congress and they DO using ill-gotten FUNDS!

Are the Wall Street Banks really healthy? With "OFF-THE-BOOKS" accounting and "MARK-TO-MARKET" Neutered who knows what the truth is!

Zombie or Otherwise?

[Carolab]

You point out the double-standard absurdity of it all so well.

[karen1p]

One word response to this article:

NO!

[Shavonda Mitchum]

It seems that banks are not too eager to stop the foreclosure madness. Many people are in the same boat as I am, with an upside down mortgage. We attempt to contact the banks for refi or modification, and are met with very hostile customer services reps, who do everything to deter you from seeking assistance. One rep even refused to give me the address to the loss mitigation dept at US Bank. It seems to me the banks are very unwilling to assist in default prevention. I have been making regular contact with my bank since Feb, and haven't been given any help at all.
Who wants to lose their home? If given a realistic opportunity I think most people would do whatever it takes to keep their homes, but the banks continue to be motivated by greed. Some people made very bad choices and bit off much more than they could chew. But not everyone who is seeking assistance falls into that category. You must also look at the current state of the economy, job loss, tax increases, gas prices, child care cost, increased energy cost, all of these thing contribute to the change ones monthly budget.
Even those who can afford their homes are being affected. As foreclosures increase, crimes increase, the homeless numbers increase, and property values decrease. I know banks are in business to make money but the desire to increase their profit, is leaving our communities paying a heavy price.

[dnpvd51]

Falling home prices are good for the truly needy people.

And if you are losing your house because of a lost job, the last thing you want is for the government to inflate housing prices because when you go look for a place to rent you will have to pay that much more.

[mlm4420]

Sandiegoco­nservative­:

Many of us bought our homes while putting a sizable downpayment and going through conventional fiancing. You need to educate yourself as the meltdown in mortgages was not caused by people buying more than their budget allowed. Property prices have dropped as a result of foreclosures which were a direct result of bank greed and the driving upward of homeprices that were unsustainable to the majority of borrowers. Now that prices have plummeted and most of are sitting on sinking ships, yes, it is the right thing to do to for the banks to modify all these loans (at their expense) that they approved.

[5hy56]

vTake back the trillions of $$$ given to the banks, who just sit on it and make it totally ineffective then start government incentive to create realistic industries that give employment and generate real productive income, some of which would hopefully be from exports.

Every other country, especially China and most of Europe have goverment incentives to protect it's industries. No matter what you call it it's a form of protectionism and its inevitable. We should stop being naive and take care of our own house. The only ones who win if we don't are the multinational corporations who don't care where they get their hand out.

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[sandiegoconservative]

Congrats to all those irresponsible home owners who bought more than they could afford. You now get the pleasure of benefitting from the rest of us who work hard and were responsible when we bought our homes.

Now more people get to experience what welfare is like. Something for nothing.

[karen1p]

EGO Conservative:

I am not an irresponsible home owner. I have put down 20%, fixed mortgage. Sitting here with no job.....because I was employed in the housing sector. No jobs available. What do you expect me to do?

The house will be taken back by the bank and my $80K that I put down....up in flames.

So F*** YOU!!! You don't know $hlt!

[eddieflorida]

karen,

i agree with your comments to sandiegoco­nservative­.

i too put 20% down on my home with a fixed mortgage, no line of credit or 2nd mortgage.

as a realtor in the last few years my income has dried up due to the mess w/the banks.

i've lost nearly 1/2 of the equity/value in my home. the house next door to me,1,000 s.f. larger than mine, sold as a foreclosure for 25% LESS than my mortgage. how can i sell my home?

the bank, who i've been talking to for two years has given me no help. they say it's a fannie mae loan and i don't qualify. i need an income stream, etc etc. HEY, i'm a realtor...in the housing market...duh!!

NOTHING is being SAID OR DONE to aid the millions of us self-employed housing sector workers - realtors, mortgage brokers, builders, handymen, inspectors, etc AND all of us in BIG TROUBLE.

where is our help? we can't even get traditional help like unemployment and food stamps.

does the government expect all of us to get jobs at walmart?

even though i've worked my entire life and can show a steady increase in earnings for 40 years, until 2007, i'm now unemployable, un-helpable by banks and government, and vilified by many as deserving my situation.

i've spent my savings, cashed in my stock and 401k, to keep from being the "deadbeat"...now what?

[tandrmcdonald]

We bought our house last May (2008) we applied for the $7500 tax credit/loan. Still haven't heard a word or seen a dollar. Then the government came out with an $8000 grant for people who buy this year....hmmm?

[Navision]

I heard a couple of weeks ago, that only one household qualified for Obama's Plan.

Most Of this spending is smoke and mirrors, NONE OF IT IS GETTING DOWN TO THE PEOPLE........

[dnpvd51]

I am sickened by reading the comments here.

All these selfish homeowners looking to government for a bailout.

It is disgusting.

[dnpvd51]

I rent and I resent paying taxes so financially inept homeowners can get bailed out.

Why do I have to pay taxes to inflate the price of overinflated housing prices so if I choose to buy a house I then have to pay too much for it.

And also there is a correlation between housing prices and rents. It is madness that I have to pay taxes to inflate housing prices so my landlord can charge me more money.

[leevntheus]

CITI does NOTHING to renegotiate loans while taking BILLIONS in free money to stay "profitable". I have not made a house payment in 10 months while they refuse to take 15% less. They would rather take $0 than 85%. But they think I should keep paying on a property worth 30% less.

When Obama was running for pres, he trotted out all sorts of little rumours about taking over upside down houses and renegotiating the loans. EVERY STEP OF THE WAY THAT IDEA HAS BEEN STOPPED. The banks keep getting taxpayer money, and homeowners keep losing homes. Obama is NOT for the little guy, he is a TOOL of the BANKERS.

[5hy56]

The recovery is a forest. People have let their credit cards go, and don"t have mortgage payments it looks as if we are spending more and people have disposable incomes again. Actually, savings are getting drained and there are no new jobs. We are in the calm before the storm. People are spending what every little cash they have left on eating out and shopping for smaller ticket items. This will come to an end in 6 months. There are no new jobs. Can you hear the quiet in America?

hat tip to href=".http://short.ie/g264dk">E for providing good finance and economics articles

[TJCole]

This makes Bush's disregard for the people and the calamity of Katrina seem small by comparison...!

A national disgrace...

If only Dr. King were alive to set Obama straight...!

[munki]

PLEASE HELP!!!!

our area is jumbo!