Government's mortgage loan modification a floundering option for Miami homeowners seeking to stop foreclosure
President Obama's effort to help homeowners avoid foreclosure is not working and the Treasury Department has failed to fix the program, the Associated Press reported. The news comes as government watchdogs report to Congress on the effectiveness of the program.
Our Miami foreclosure defense attorneys continue to report problems with the program. Those seeking to get out of foreclosure or stop foreclosure sales in South Florida need to consult with an experienced attorney about their options. Short-sale, foreclosure, strategic default, loan modifications or government assistance are all options with their own potential drawbacks and benefits.
The inspector general for the government's financial bailout plan said the plan has not "put an appreciable dent in foreclosure filings." He also said the Treasury Department has ignored demands that it set clear goals for the program. Officials are worried the program's failure could contribute to additional foreclosures. That, in turn, will further drive down prices and stall the recovery of the real estate market and the overall economy.
The program's aim is to reduce mortgage payments for struggling homeowners. But statistics show more homeowners have dropped out of the program than have been helped by it. About $248 million has been spent on the program, a small fraction of the $50 billion allotted. About 400,000 homeowners have been assisted while about 530,000 have dropped out of the program.
Critics say the government is allowing mortgage companies too much control over which homeowners will qualify for reductions in the principal balance of their mortgage loans. The program also relies on voluntary participation from mortgage companies. Meanwhile, many mortgage debt collectors make more money by forcing a property into foreclosure than they do by providing help to homeowners.
