The main goals of the Obama foreclosure policy are to encourage more approvals for loan modifications, boost the number of approved applications for refinancing, and offer more home loans to people who want to acquire a house for the first time.  The Helping Families Save Their Homes Act that was signed into law in May 2009 by President Barack Obama is the main basis for the policy.  This legislation is a follow-up to the previous law known as the Hope for Homeowners Act that was tasked with assisting borrowers who found that the prices of their homes have become lower than the outstanding balance of their loans.

The Obama foreclosure policy is designed to help homeowners in getting the approval of the lenders, such as banks, for their petition for the refinancing of their loans so that their monthly payments will be reduced to affordable amounts.  However, an important qualification requirement is that the outstanding balance should not surpass the current home price by more than five percent.  The second goal of the President’s policy is to give incentives to the different banks and lenders whenever they approve a home loan modification that pushes down the monthly installments to an amount that does not exceed 31 percent of the monthly pay of the borrower.  The obama foreclosure policy also ensures that Fannie Mae and Freddie Mac will be approving more new home loans by giving additional funds to these two corporations.

However, some have pointed out that the policy has had negligible effects as of September 2009 and its critics have jumped at the chance of highlighting the plan’s defects.  At the other end of the spectrum, those who favor the Obama foreclosure policy claim that it has started to have some positive effects.  For one, the plan seems to have been responsible for reversing the declining trend in home market values and the rising number of foreclosure filings in a number of states.  But those who are against the initiative countered that only a small number of the homeowners who should have qualified were granted loan modifications.  Other opponents of the Obama foreclosure policy also argued that the plan had not been based on dependable economic principles.  However, the Obama Administration remained optimistic about the plan and has reported that an important achievement was reached with regards to the number of approved loan modifications.  The members of the President’s Administration are optimistic that the Chief Executive’s anti-foreclosure strategy will work out in the long run and continue to inform the public about its achievements.

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The second stage in which you can buy a foreclosure property is the auction where you need to pay a small deposit and then pay the down payment after several days.  To show that you really intend to buy a particular property that you have won in the bidding, you will have to pay a small deposit on the spot.  You may then be required to pay the down payment within a matter of days.  Therefore, it is vital to have your deposit in hand and the source of your funds in readiness before you go to the auction.  Make sure that you have thoroughly examined the home before going to the auction and that you have already calculated the potential expenses required because the properties are being sold as is and without warranty.

The last stage at which you can purchase a foreclosed home is after the auction where it is listed as Real Estate Owned (REO).  Substantial discounts could be had when buying REO properties because the lender is in a hurry to convert the home into money that he can lend.  This provides you with several ways to negotiate for a lower price and easier terms.  Buying at this stage has the added benefit of being assured that you are getting a clear title because the lender would already have paid off any outstanding taxes, liens, or any other unpaid expenses.

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There were almost 938,000 forecloser homes during the period of July to September 2009, which is approximately 48,000 homes more than the preceding quarter.  At this rate, the number of foreclosure filings is expected to reach approximately 3.5 million for the whole year of 2009, which is much higher than the 2.3 million filings in 2008.

The primary reason for the rise in the forecloser rate, in the spite of many economists claiming that the recession is over, has been the unemployment rate, which has attained a record level of 9.8 percent for last the 26 years.  Moreover, experts have predicted that the unemployment rate will keep on rising until it will attain its highest level in the middle of 2010.  Mortgage lenders are trying to help by permitting the homeowners to be delayed by three to six months in their payments as they look for work.  However, with the record unemployment rate, it is very difficult for those who have lost their jobs to find work.

The Administration of President Obama had recently reported that its initiative has attained an important milestone when more than 500,000 loan modifications have been granted.  However, the rise in the number of people defaulting on their loans has been much faster than the increase in the number of people getting loan modifications.

Somehow, mortgage companies have been trying to reduce the impact of the housing crisis by slowing down the rate of foreclosures.  They have been trying to examine whether the borrowers would be able to fulfill the requirements for the Making Home Affordable program of the Obama Administration.  However, analysts believe that a large number of these homeowners would not be eligible and they predict that more forecloser homes will become available in 2010.  This is expected to pull down home market values further.  It has been observed that the financial problems being experienced by some of the borrowers are so massive that banks and lenders are finding it impossible to structure a loan modification plan that would fit their current income capacity.

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