Home mortgage foreclosure rates increased 30 percent in February when compared to the same month in 2008. Both home mortgage delinquencies and foreclosures are at the highest points the Mortgage Bankers Association has recorded since they began keeping track in 1972. Unemployment was at 8.1 percent in February. Decreasing or stagnant property values are still troubling many markets. Although the government recently unveiled a huge housing aid package, consumers appear to be reluctant to make any real estate purchases. The President vows to lend a hand to responsible homeowners before they are in danger of losing their homes.
There is a lot of chatter about responsible consumers having to bear the burden for borrowers who took on a bigger mortgage than they should have. The Obama plan, which designates $75 billion to help ease mortgage payments for troubled consumers, claims to help all homeowners in the long run. The argument for helping troubled homeowners is that home values will be driven down in neighborhoods that have many foreclosed properties. By allowing more people to stay in their homes, neighborhoods and communities can stay strong. It is, therefore, in the best interest of all homeowners that their tax dollars are put toward helping people stay in their homes and keeping the community together.
To qualify for a home mortgage modification under the housing aid package, a homeowner must meet certain criteria. The home must be the principal residence of and owned by the applicant. If a home mortgage was obtained before 2009, it can be considered. It must be demonstrated that the homeowner has been dealing with financial difficulty (for example, a lay off or reduction in pay) that has made it challenging for him to pay his mortgage bills. Lastly, it must be determined that the current home mortgage bills each month are greater than 31 percent of monthly earnings. This bill will not allow everyone to stay in their homes. Those who will clearly not be able to make their home mortgage payments, in spite of loan modifications, may have to go into foreclosure. History will be the judge of whether this new housing aid package will give the housing sector relief from home mortgage foreclosure and delinquency rates. Those consumers who have been living within their means and have made sound financial decisions will, indeed, be giving tax dollars to help those that did not make such wise decisions. But many experts believe the consequences of not doing so would devastate an already battered staple of the economy.

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