President Obama is “Making Homes Affordable”

President Obama’s mortgage relief program also called the “Making Home Affordable” plan is starting to make progress after a slow beginning, according to a recent article by Alan Zibel of the Associated Press. Obama’s mortgage relief program entails $50 billion worth of changes and officially began in March, but never seemed to take hold until recently. The whole concept behind the legislation was for lenders to reduce the monthly mortgage payments for homeowners that needed it. Lenders were not exactly eager to jump on board and help out those that need it, but now we are happy to report that the program currently  has 48 lenders participating. That may not seem like a lot, but it is already up from 38 in July and hopefully will continue to grow. The participating companies say they are on track to have 500,000 loan modifications in place by Nov. 1.

During the month of August lenders sent out  over 571,000 offers to reduce borrower’s monthly payments according to the Treasury Department. Unfortunately, this accounted for only 19% of the nearly 3 million homeowners eligible for the plan. Considering less than one-fifth of the eligible homeowners are actually getting assistance, many people are hoping to see improvements made to the program. One suggested improvement is for there to be consequences for the lenders that are not cooperating.

Now that we have seen published numbers (there is a bar graph published with the original article) of the lenders that are cooperating, many mortgage executives are racing to implement the plan in order to catch up to the rest. One great example is how Bank of America doubled their trial modifications in only two months. We should see more and more lenders willing to send out offers to eligible homeowners, which will help decrease the number of foreclosures currently plaguing the housing market.