Obama’s Foreclosure Moratoriums And Modification Plans

A lot of homeowners seem to have a false idea of what a foreclosure moratorium is.Many seem to think there is a nationwide moratorium that is eliminating foreclosures, while others believe that the government is bailing everyone out of foreclosure. These two ideas couldn’t be further from what is actually happening.

If you are facing foreclosure, please don’t rely on Obama to save your property! More families are losing their home every single day; while homeowners think their lender is trying to get them a workout plan, their home gets sold right out from under them.

If you are waiting on your bank to approve a modification or bailout, you need to make sure you have a back up plan for when theyfail! And that’s assuming they are even working on your case in the first place. Many lenders tell you they are “working” on your case, while they quietly continue foreclosing on your home. This is a drastic problem and homeowners need to wake up and smell the coffee!

Foreclosures are still increasing in many areas and because of this, many families are being left homeless. As local governments realize the federal bailout plan isn’t working, they are allowing officials to impose their own foreclosure rules and moratoriums.

Federal moratoriums are not a universal requirement. In some cases, only certain loans qualify for the moratorium. In others, the bank are only asked to be involved, but no laws or rules are forcing them.

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When a local court or government passes a moratorium, it usually applies to all foreclosures in that particular county.

Many of the bigger servicers have voluntarily agreed to these moratoriums, even when it was not required of them by law, but for the most part, the moratoriums have ended and servicers are back to foreclosing on houses in full swing.

Foreclosure moratoriums have been tried, sporadically, over the last several months.

Different servicers, courts, or government agencies have determined that it may help. The truth is, these moratoriums are not doing much of anything to help the situation. They are simply putting off a problem until a later date; as we all know, procrastination is never a good thing. Local courts seem to be following the federal government’s model, by starting with a 90 day moratorium and expecting homeowners to stop foreclosure before this 90 day period ends.

The problem with this plan is that no one really knows how to stop foreclosure. Homeowners think the government is helping them, so they sit back on do nothing. Servicers don’t understand what to do either, so they are just letting everyone apply for a modification, while giving them false hope that they will get approved.

Today, one thing is completely apparent, the only people getting help are those that take action on their own and forget about bailout plans and moratoriums! Those who find their own way out of foreclosure or hire a professional to help them are saving their homes at a much higher percentage rate. In fact, many loan modification companies have success rates well above 90%. This is much better than the 20% success rate our government may one day achieve.

Others are still losing their property just as quickly as before; even faster in most cases, because court systems and lenders are now expediting the foreclosure process. There are so many foreclosure cases that foreclosure victims are no longer getting a impartial trial. Some courts are rushing through foreclosure cases in just a few minutes per case. Proper documentation is no longer necessary and the foreclosure victims never even have a chance without a lawyer to protect them.

Originally it was though that a moratorium would provide families enough time for the government to offer a bailout plan, but now we all realize that the government’s idea of a bailout doesn’t really help the average foreclosure victim. I think it’s common knowledge that procrastination is never a goodthing and that’s basically what these moratoriums are. Rather than coming up with an actual solution, it was easier to put the issue off for 90 days.

The overwhelming issue with a moratorium is that it gives the foreclosure victim a false sense of security. They think their home is safe; in reality, after the moratorium ends (most moratoriums last 90 days) the foreclosure process will carry on as if it never stopped. In some cases, the foreclosure process even continues during the moratorium and the sale happens almost immediately after it ends.

If you are lucky enough to have a foreclosure that has been put on hold by a moratorium, the don’t waste any time establishing a solution, so your property is not lost when the moratorium is finished! Use this time wisely to recover from your financial hardship, or to find a professional to negotiate the terms of a loan modification with your servicer.

There are many solutions to stop foreclosure, but remember, a moratorium is not one of them! Unless the foreclosure situation is resolved during this time, the home will be lost when the moratorium ends.

Nick publishes articles on the ForeclosureFish website, which attempts to educate borrowers how they can prevent on their homes while they still have time. The site describes various methods to hold onto a house, including foreclosure refinancing, deed in lieu, mortgage modification, filing bankruptcy, and more. Visit the site today to read more and discover what alternatives you can use to prevent the loss of your home: www.foreclosurefish.com/