According to an article in the Star-Telegram, the Congressional Oversight Panel which is responsible for making regular assessments of the $700 billion financial bailout of banks has reported that the foreclosure plan “Making Home Affordable” has failed to hit the mark. The committee recommended that the Treasury Department either improve the program or adopt a new program that directly addresses foreclosures caused by the rise in job losses.
The article said:
“Serious concerns remain about the program’s scope, scale and permanence,” Warren told reporters in a conference call. “In particular it isn’t clear that 500,000 modifications will be enough to put a serious dent in the foreclosure crisis or to dampen the impact of foreclosure on the broader economy.”
A matter of fact more homeowners who have put down as much as 20 percent in a down payment on their homes and have considerable home equity are now facing foreclosure because job losses. The mortgage modification program is not adapted to meet the needs of this demographic who are facing more foreclosures.
What happens when someone has paid faithfully on their home for 10 years and then lose their job in the middle of a recession that some are describing as a depression? Can we in good conscious allow them to succumb to foreclosure without a good fight? Right now they are falling victim to foreclosure because the mortgage modification plan does not help the unemployed avoid foreclosure .
Many homeowners facing long-term unemployment have been wise enough to move quickly within six months of a job loss and file bankruptcy to discharge their unsecured or in some way drastically reduce their expenses. After reducing their expenses through bankruptcy or other means, they have freed up money that can be used to pay their mortgage and avoid foreclosure.