Much has been made of our government's efforts to help stem the foreclosure crisis, but little seems to be actually helping the people who need it. Two articles in the April 30, 2008 Sunday business pages of the New York Times report on two such failed attempts.

The first measure Congress passed to assist homeowners back in February was included in the economic stimulus package. Rules were instituted to increase the ceiling for mortgages that used to be considered jumbo. In other words, for people whose mortgages were more than $417,000, they could refinance from a jumbo mortgage (which are usually more expensive) to a conventional mortgage. Although it varies by location, in some cities the ceiling was raised to $730,000. Unfortunately, the program has been a failure, since lenders have not actually lowered the rates as lawmakers had expected, and mortgage brokers quoted in the article say they are unable to find lenders willing to utilize the new program.

In the meantime, the Federal Housing Administration (FHA) has been touting the benefits of FHW Secure, a program to help alleviate foreclosures. The New York Times reported, however, that of the 150,000 the FHA claims to have helped, only 1,729 were actually behind in their mortgage payments. In 2008, while FHA Secure will assist approximately 400,000 homeowners refinance their mortgages, only 4,000 of those are expected to be delinquent in their payments. In other words, the FHA will help, but the assistance that is available is largely going to those borrowers who don't really need the help.

At Resolve Legal, we are doing our best to keep up with the dizzying array of temporary fixes and band-aid solutions proposed by various agencies in charge of monitoring our country's financial institutions. If we are able to discover any that actually will help the people most in need, we'll be sure to let you know.

Labels: mortgages, politics