The foreclosure bailout is designed to help certain people. This plan set forth by Obama targets two groups of people. These people include lenders and current homeowners.
Is it the though that counts when someone is trying to help another or was there really any thought put into the foreclosure bailout? There are almost 5 million people who are losing their homes to foreclosure. There are over 20 million people who have already lost their homes. Many people who did lose their homes already and are in serious financial help actually had some hope that Obama would help them with their financial difficulties. Unfortunately, the bailout was to help people who haven’t lost their homes yet. Maybe because this number of people is smaller or maybe because Obama really wasn’t sure how to address the problem.
The banks are chastised in the foreclosure plan for giving home loans to people at rates that they really couldn’t pay for their homes. The lenders are also in the red because they own so many homes now because the homes have foreclosed so they are sitting on the banks books. No bank wants to own a home but because of the abundance of homes they cannot give out any more home loans until they unload what they currently have. Lenders are being affected by the Obama plan in the way that they will have to follow stricter guidelines about how they give out home loans.
Current homeowners are affected the most buy the foreclosure plan because they are finding help in many ways to keep their home. First, people who obtained first time buyer loans through FHA or Fannie Mae or Freddie Mac get the benefit of refinancing at rates that they can afford to pay monthly. This is the biggest benefit. People who financed a home through a band can get a lower monthly rate after they file bankruptcy and have a judge change the terms of their home mortgage. Filing bankruptcy must be done early enough before you lose the home in an auction because the process takes time.
There are only a few people that the foreclosure bailout is really helping. There are billions of dollars going out to buy the homes from the banks which will put the banks in a better position to give new home loans for people with good credit. The plan primarily helps the banks to get the homes off of their books, the people who obtained FHA loans to buy their homes, and people who are willing to ruin their credit and file bankruptcy.
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