The December 1, 2009 new Obama Administration housing help plan is much like the one released February 18, 2009, only difference now the administration is being harder on the banks. With mounting foreclosures the Obama Administration’s plan to help troubled borrowers will help some but not all. At present only a small fraction of people are receiving permanent loan modification less than 5% of the trial adjustments on loans owned or guaranteed by Freddie Mac were converted to permanent modifications as of 30 September 2009. So while Americans facing foreclosure are waiting for a modification, others are going into foreclosure, 14.41% in the 3rd quarter, according to the mortgage bankers association. If no one knows why the conversion rate is low, then this is an issue which needs to be addressed. The banks need to be held accountable for their end of the low modification rate. Borrowers that qualify for a long term modification can keep the lower payments for 5years. At the end of the 5 year period the interest rate will be set to the rate at the time of the adjustment. This is why an income requirement is so critical. If the payments being made are too low then the loan modification would be pointless and damaging, causing negative amortization. Negative amortization will make the balance due high than before the modification. Needless to say your financial documents are extremely important.

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There are thousands of foreclosed homes and short sales, there has never been a better time to get a great deal. But before you do here are a few tips because there can be expensive problems. Know what getting into before you buy a foreclosed property or short sale. Owners of foreclosed properties do not want to leave there homes. They can and do take there frustration out on the property. One property that was taken over by the bank found that 1200 gallons of cooking oil was dumped into the septic. The previous owner is currently under investigation for the incident but has not been charged. The previous owner had a bio-diesel company. Owners have removed toilets, sinks, damaged flooring and actually taken out widows. Properties that are empty can run into serious problems also, water damage, pipes freezing, mold, thieves, and rodents.

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