Are Re-Modification Loans Helping American Homeowners?

As a result of the recession in America the housing market has reached a point of no return. The foreclosure rate is higher than it has ever been in U.S. history. Many hard working Americans were desperately seeking relief for this ongoing problem. The so called economic experts were scratching their heads trying to find a solution to this foreclosure crisis. After months of putting their heads together the economic think tanks came up with a way to resolve the foreclosure problem. The solution that they came up with was offering homeowners who were having problems with their mortgage payments an opportunity to obtain a re-modification loan. This type of loan would help many people that had their homes financed by sub-prime lenders. At first this problem had been ignored because these were the lenders that financed people who did not have perfect credit; also their interest rates and monthly payments were higher. These two factors led to many people losing their homes.

Re-modification loans were not the solution to the foreclosure problem; instead the problem became much worse. The way this program works is that the homeowner's income would be evaluated along with bills and other financial obligations. In the meantime the homeowner would temporarily be required to pay a reduced monthly mortgage payment. Now this may sound good but there are many inconsistencies with this type of loan. It seems like a form of predatory lending that has been legitimized by the government. The terms of re-modification loans are very deceptive. It is quite evident that something is not right with these loans because since the inception of the re-modification loan only 9 percent of people who applied for it have been approved. If a homeowner is not approved for the loan they are responsible for the left over funds from temporary reduced monthly mortgage payment. This further places people under water in their homes. Being under water basically means that homeowner owes more on a house than it is actually worth. This is like taking two steps forward and three steps backwards; no progress is being made. Many of these mortgage companies are preying off of the desperation of homeowners who want to maintain the American dream of home ownership. It is in the homeowners' best interest to seek more options that may be available to them. A re-modification loan should be a last resort for homeowners' mortgage problems.