It is Imperative for the Government to Save Homes from Foreclosures

It is imperative for the government to save homes from foreclosures or the Great Recession – as the present crisis has been named. It is the failure of the housing sector that is continuing to push the economy down with more and more foreclosures rushing in mercilessly and ruthlessly. The rate is truly astonishing.

The measures taken by the Obama administration has had a limited impact. Recently the Treasury Department said that merely 270,000 borrowers have been offered modification of their loans under the Making Home Affordable measure. But from this only 131,000 have actually had their loans modified. This is the picture till July 2009.

In Florida Bay 3.5 million borrowers are facing foreclosure with the rate calculating to a staggering 10,000 each day. This is mainly because the mortgage holders are reluctant to modify underwater loans – or loans that are heavier than the worth of the property mortgaged. The ARM loans have started to increase rates to add to the mayhem. One reliable figure estimates that till March 15 million homes had gone underwater.

News trickling in show that the economic weather is improving across the country but the people continues to remain skeptical. This has been an artificial breather because of moratoriums and state laws. These rules will ultimately end and the homeowners will find themselves once more in deep trouble.

The Obama government is very much alert to the problem but it has yet to come up with a new effective strategy. Timothy Geithner, the Treasury Secretary as well as HUD Secretary Shaun Donovan have sent for 25 top bankers of USA together with many servicers to come to Washington. The riot act will be read to them and pressure will be put on them to be more visible and positive in their attitude towards helping the borrowers at risk from foreclosures.

The request is not unreasonable considering the billions the banks have swallowed as bail out money that has come from the pockets of the taxpayers. Banks have persisted in following the foreclosure process. Moreover they have shied away from lowering the falsely inflated worth of the properties. It is hoped that a sharp rebuke from the government and the threat that a list of the truant banks will be published might produce some action.

If this does not work then the Congress has the option of introducing the matter of empowering bankruptcy judges to alter the terms of the mortgage.

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