Home mortgage foreclosure rates have reached historically high levels. The number of delinquencies has risen for eight quarters straight, with over 2 million homeowners filing for foreclosure in the past year. Some analysts predict that in the next few years that number could jump to 10 million. Many borrowers took on a home mortgage that was more than they could afford in the long run, as they felt certain the real estate market would maintain its upward trend and credit seemed easy to come by. During this time, the subprime home mortgage market flourished, as more and more lenders offered loans to consumers who did not qualify for regular prime loans. Some of those people were able to take on those loans with zero down payment or proof of their wages and assets. In other cases, a consumer took on an adjustable rate home mortgage anticipating that the home value would increase or they would get a raise before the rates changed. There was so much optimism about the housing market that banks were selling more and more home mortgage loans on the secondary mortgage market to be packaged and sold as mortgage backed securities. When the real estate market began to decline and the credit crisis set in, many consumers, banks and investors found themselves struggling.
Only a month into his new office, President Obama has made it clear that any plan to help stimulate the economy will include help to boost the ailing real estate sector. And any stimulus plan will certainly try to stem the rate of home mortgage deliquencies. As the country anxiously awaits the specifics of the stimulus package, things such as incentives for banks to lower home mortgage bills are being discussed. The new President has made it clear that he would like to assist those in trouble before they become delinquent. It will be difficult task to determine who will qualify for assistance and who will not. For those who will qualify, a rate reduction or a postponement of principal might be options offered to make a home mortgage more financially manageable. A home mortgage foreclosure is more costly to a bank than a loan modification, so many banks are anxiously awaiting the details of how the $50 billion will be put to use to help the housing sector. Many lenders have, in fact, delayed additional home mortgage foreclosure actions pending the details of the new Obama plan.

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