IF It’s Free Then You Must Flee

Feldman Law Center - Loan Modifications : government Programs to Make a tiny Dent in the issue

The Obama Administration's'Housing Affordability and Stability Plan' was announced with much fanfare as its guiding principles were rolled out in late February. The plan included $75 bill for motivation payments for lenders and loan servicers that either took part voluntarily or were mandated into the program as receivers of FSA/TARP funds, incentives to homeowners that could make payments on time for year, and payments that would not be greater than 31% of household earnings. At the time, administration officials and The Treasury Department ascertained that the plan would help between four and 5,000,000 homeowners stay in their houses and avoid foreclosure.

The plan is off to a particularly modest start according to Treasury spokeswoman, Jenni Engebretsen. In a recent NY Times article she predicted the total of loan modifications under the plan were'more than ten thousand but fewer than 55,000.' A cynic might say that she is's likely being truthful and that the number is probably much closer to the low end of the range provided. When shrivel Chamberlain scored one hundred points in one game for the Philadelphia 76'ers one of his colleagues quipped in the locker room afterward,'I'll always remember this game as the night wilt and I mixed to score 102 points.' Engebretsen's guesstimate is paying homage to that sort of truth-telling.

Considering RealtyTrac latterly released a statement which showed foreclosure filings, default notices, auction sale notices, and bank repossessions totaled 342,038 for the month of Apr, the Treasury's estimates for finished loan alterations don't give cause for party. Householders, acting at the request of Obama's'If you've got to pay, walk away' sound bite aren't having any more luck doing their own loan modifications than they were before the statement of HASP, while lawyer driven loan modifications continue at a brisk pace. The trickle of loan alterations being done through govt sanctioned venues is simply miles away from enough. Alan Ruskin, chief international strategist at RBS Greenwich Capital put it more succinctly saying,'I don't think there's any chance of government measures making more than a little dent.'

Recent suggestions show the economy isn't going to provide any kind of tail-wind any time soon. Foreclosure activity increased thru 2008 as job losses averaged 256,000 per month. That rate has increased to a once a month average of 665,000 job losses each month for the first four months of 2009. Repos are probably going to increase under anything close to those numbers, deepening the workload of modification processors even more. With all that under consideration, homeowners' best option is still lies in the hiring of professional legal counsel to navigate an obstacle course that will only become more complicated as repossessions increase. In addition, while hiring a lawyer, householders may wish to reconsider Obama's sound bite and instead go with'If it is free, then you should flee'.

The Feldman Law Centerhas enjoyed a long affiliation with KFI Radio. The partnership embodies the best parts of all business relationships ; trust, professionalism, and the shared goals of informing and helping folks through these trying business times.

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