Loan Modifications: Reports are Mixed on Whether They are Working to Help Families Save Their Home

800px-Skyline_Miami.jpgShortly after taking office, President Barack Obama announced an ambitious plan to help rescue the housing market from total collapse. The plan centered on the restructuring of distressed mortgages to help keep struggling borrowers in their homes while also inserting a floor beneath the plummeting property values. Put differently, the plan was intended to keep many borrowers in their homes, even if the property value for that home was “upside down”, and this in turn would slow the flow of foreclosures entering the marketplace thereby stabilizing the “freefall” of housing prices.

Unfortunately, the plan has not helped as many people as the administration would have hoped or originally projected it would help. On the other hand, it is important to note that the plan was never intended to be a cure for the pains felt by every single distressed homeowner, so it was never intended to “end” foreclosures and “stop” real estate values from plummeting further. But it was intended to reach more people than it has currently. Indeed, the administration’s plan even provided financial incentives for many financial institutions to help modify mortgages, and the more mortgages that are modified, in theory anyway, should help slow the decline in real estate values.

The Wall Street Journal was recently critical of the administration’s loan modification program. But while it was it critical of the program as a whole, it did conclude that the plan is nonetheless still useful and should continue to be pursued.

But the USA Today also recently reported that many financial institutions have taken it upon themselves to modify, and restructure, many mortgages while not participating in the administration’s plan.

Those internal, or private, modifications are not reported, and are therefore not counted towards the figures used, by the government, when determining whether or not the government’s modification program has been a success, or at least reaching more people each passing day. Far less is known about these private alternatives because they are often times done privately by lenders using different criteria and methods than those laid out by the administration in their plan to rescue the real estate market.

Hiring a Miami foreclosure defense attorney is the best course of action for homeowners seeking to save your home or for those seeking to avoid or prevent a foreclosure sale, as well as to assess your viability in the loan modification process. As reported in our Miami Real Estate Attorney Blog, there are many options for homeowners to potentially save your home.

We have been successful in defending many foreclosure cases when given an opportunity to develop a plan to properly defend the foreclosure.

If you are on the brink of foreclosure, and need to assess your legal rights, please contact our office today.