February 19th, 2009 by Reed Allmand 
According to an article in the
Star-Telegram, in addition to the homeowner’s program designed to stop foreclosures, the Obama administration announced that is giving another $200 billion in bail out funds to Fannie Mae and Freddie Mac as part of a plan to reduce foreclosures nationwide.
The article quoted Sheila Bair, Chairman of the Federal Deposit Insurance Company:
“There will still be some borrowers who lose their homes to foreclosure. Some of that will be inevitable. But this should have a significant reduction in the foreclosure rate, bringing it more in line with historical levels.”
I think Mr. Bair is making the understatement of the year. There are going to be a lot of foreclosures despite this foreclosure plan. With the government foreclosure plan the power to modify mortgages is still being left in the hands of the mortgage companies that created the toxic mortgages in the first place. The mortgage companies have already shown that they are often unwilling to modify mortgages in a way that is truly affordable for homeowners, which is why so many homeowners with mortgages voluntarily modified end up in foreclosures anyway. These mortgage modifications must be overseen and regulated to make sure they are fair, affordable and truly stop foreclosure, not just delay it.
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."
View all posts by Reed AllmandSubscribe
Subscribe to our e-mail newsletter to receive updates.
