Read This

[casdem1]

I wish my city had a program like this. Our biggest obstacle was actually speaking to the mtg company. I hope this helps people!

http://www.msnbc.msn.com/id/32510388/ns/business-mortgage_mess/

[hereforinfo]

That seems like an excellent program and hopefully more counties/states will do something similar.

[justbroke]

Unfortunately, the cities and towns are only doing this for money. Everyone is motivated by revenue and cities and towns are no different when it comes to property taxes. While the lender would pay property taxes, devaluation is likely to settle in when many properties are actually foreclosed upon. This causes shortages in tax revenue from property taxes and causes the communities to increase their millage rate. Increasing the millage rate then causes more issues, especially with programs like Save our Taxes (in Florida) which don't allow the municipalities to increase the millage rate on homesteaded properties by more than a fixed percentage. This leads to either more foreclosures (because people can't afford the new taxes) or loss of revenue to do lack or resales.

A vicious circle.

I am on the fence about this "talk to the debtor/borrower". These moratoriums just delay the inevitable. Look at modifications. I believe it's like 50% of those who receive modifications, end up in trouble within a 6 months of the modification. The percentage is higher when it's within 1 year of the modification.

This tells me that fundamentally, the problem is that people are in homes that they just cannot afford. Don't get me wrong, I may be one of them.

Does this program even have teeth?

Absolutely not. The article even points out that "the foreclosure process can continue while a homeowner goes through mediation". It also states that "it is not going to solve every single person's problem". As a matter of fact, only 30 people have used the program since 7/1/2009, and there are no stats on its success.

Now I think this program is no different than what most lenders offer anyhow. They send letters asking the homeowners to call them, but the majority never do. The programs are no different than you could do over the phone. That is forbearance and installment payments (each past due month is paid over 4 months... so 2 missed payments is paid back in 8 months... 8 equal payments). These end up not working anyhow. The only thing that really saves people, temporarily, are modifications. The article mentions not one thing about actual loan modifications. Even with modifications, more than 60% of those fail within a year.

In the end, yes, it keeps people in their homes... but for how long? It just delays the inevitable, and perhaps that is good for some people, to get the delay. I was never one for the Death March, however.