Chicago Near The Top In Obama Loan Modifications
December 18th, 2009 categories: Chicago Info/News, Chicago Neighborhoods, Economic Recovery, For Buyers, For Homeowners, For Sellers, Foreclosures, Housing Market
Ever since taking office, Pres. Obama has made slowing the rate of housing foreclosures one of his top priorities. This makes sense: Housing foreclosures drag down housing prices. They become neighborhood eyesores. And until the number of foreclosures falls to normal levels, the housing market won’t truly rebound.
That’s why the president and his administration worked together to create the Making Home Affordable program. The program encourages mortgage lenders, through financial incentives, to work with homeowners to keep them from losing their residences to foreclosure. Lenders will often modify the mortgage loans of homeowners who are struggling to make their payments each month. Modification may entail lowering the loan’s interest rate, stretching out its term or simply lowering the amount of principal owed. In each case, the homeowner’s monthly mortgage payment would go down.
According to a story in the Chicago Tribune, about 36,000 local homeowners have received some type of permanent or temporary loan modification as of the end of November. This ranks the Chicago area as one of the busiest sites of Obama’s loan-modification program goes.
Not everyone’s happy with the Obama program, though. Many critics point out that the program hasn’t been helping homeowners as quickly as the government pointed out. Many banks participating in the program haven’t modified nearly as many loans as government officials were hoping.
This is to be expected with any new program as complex as the loan-modification plan. Hopefully, the kinks will be worked out and more homeowners, in Chicago and nationally, will modify their mortgage loans. This is far better than letting these homeowners lose their homes to foreclosure.
And if the government doesn’t step in, that’s what will happen. A new report from First American CoreLogic proves it: This report, issued earlier this month, said that 9.41 percent of mortgage loans in the Chicago area were 90 days or more delinquent in October. This same rate stood at 5.02 percent just one year earlier.
I know many of you aren’t happy that the government is helping struggling homeowners. Yes, some of these homeowners did stretch themselves financially to get into homes that they could not afford. But many more are facing foreclosure because they lost their jobs or suffered a serious illness. This economic slump has shown us how easy it is to have the financial rug pulled out from under you. Simply put, I support any measure that slows the rate of housing foreclosures and in turn, help the market recover. This recovery benefits everybody in much the same way that foreclosure are a detriment to everybody.
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