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Analysis Says Federal Mortgage Program Has Helped Prop Up Housing Prices

January 21, 2010

Our Ontario loan modification attorneys are not alone in believing that loan modification programs have not helped most homeowners avoid foreclosure. But we were interested to see a Jan. 19 article in the Wall Street Journal reporting that at least some analysts think it's helped stabilize the housing market anyway. The report from Barclays Capital says the federal Home Affordable Modification Program has helped reduce the number of foreclosed homes offered for sale, which has helped stop housing prices from sinking. This helped home prices bounce back a little in the past year, which has helped increase stability in the market, experts say.

Stabilizing housing prices and encouraging new buyers is not an official goal of HAMP, the article said. The official goal is to help borrowers in trouble keep their homes by reducing their monthly payments. The program is not considered a success, although the Treasury Department announced a small amount of progress Jan. 15. But Barclays Capital's analysis said HAMP has been successful at preventing an even steeper fall in housing prices by "buying time" for the housing market. The report said the market was flooded with foreclosed homes in 2008, which pushed prices down. But thanks to HAMP, foreclosure moratoria (like the one here in California) and other programs, the foreclosure process slowed and nearly 210,000 fewer foreclosed homes hit the market in November 2009, compared to a year earlier. Barclays Capital expects the number of foreclosures to peak again in spring or summer of 2010.

As Cerritos loan modification lawyers, we're glad that HAMP has helped slow down and possibly even reverse the fall of housing prices, which was particularly sharp here in Southern California. This should help keep some people out of foreclosure simply by leaving them equity in their homes, and hopefully start restoring more equity as prices normalize. But as this article notes, that's not the goal of HAMP, and progress toward its actual goal of preventing foreclosures has not been strong. Financial institutions have blamed government rules and borrowers themselves for this lack of progress, but media reports show that lenders and loan servicers behave like they don't really want to make loan modifications. But instead of saying so, they continue to take applications and ignore them, repeatedly lose them or deny them for spurious reasons.

If this sounds like your situation, Howard Law PC can help. Since the beginning of the housing crisis, we have represented homeowners who need help negotiating a fair loan workout. Over and over, our clients tell us stories about lenders losing paperwork, transferring them endlessly from department to department or misunderstanding basic data about the loan. When our Orange County loan modification attorneys get involved, we find that lenders frequently change their tunes. We are professional negotiators, but more importantly, we know our clients' rights and we are not afraid to enforce those rights when they've been violated. Often, just the threat of a lawsuit is enough to ensure that the institution takes our client's application seriously.

Howard Law offers free, confidential consultations, so there's no risk in speaking to us about your case and your rights. To set up a meeting, please contact us through the Internet or call us toll-free at 1-800-872-5925.