February 23rd, 2009 by Reed Allmand 
As much as the recent housing stimulus package has been promoted as a tool that will slash the rate of foreclosures by millions, the reality may be much bleaker. As the current housing stimulus is written, mortgage lenders still have no direct incentive to modify the mortgages of homeowners who are facing foreclosure and there is no punishment if they do nothing. The process to modify a mortgage with the mortgage servicer is often too overwhelming for homeowners facing foreclosure and other financial difficulties. Many homeowners are simply overwhelmed by the process, the time commitment required and the financial and legal terms they most likely do not understand. Of course there will be some impact on the rate of foreclosures; but millions more will simply fall through the cracks and succumb to foreclosure and once again the problem will not be solved.
What we need is a direct program that forces mortgage companies to modify toxic loans that are simply unaffordable for homeowners facing foreclosure. Right now, mortgage companies can pick and choose which homeowners facing foreclosure will receive a modification and which will be sent to foreclosure. And although the banks have received billions in taxpayer aid there is no oversight into how this process works. Mortgage companies need to be held accountable by the U.S. bankruptcy courts for how they modify loans and which loans they modify to help homeowners avoid foreclosure.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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