Now that President Barack Obama is fully comfortable in his second term, the White House is busy trying to improve on the foreclosure prevention initiatives that launched in the first term. Programs such as the Home Affordable Modification Program (HAMP) and the Home Affordable Refinance Program (HARP) have helped millions of homeowners in the United States to avoid foreclosure, but the White House has acknowledged that the programs have fallen short of their intended goals.
According to a recent official press release by the White House, the Obama Administration recognizes that the number of Americans facing foreclosure remains a major threat to economic recovery in the U.S. To this end, the White House has put in place three new plans of action to prevent foreclosures:
1 – Making Home Affordable
This program, which includes HAMP, is being expanded through NeighborWorks America. The expansion of this program seeks to reduce monthly mortgage payments by about $540 per month through a home loan modification. The counseling centers participating in this programs will act as an intermediary between banks and borrowers, ensuring that application documents are correct and submitted on time. Through the Making Home Affordable Program, the White House also wants to increase public awareness of the rest of the foreclosure prevention programs.
2 – Jobs for Unemployed Homeowners
Long-term unemployment is one of the major causes of mortgage default and foreclosure in the U.S. To this end, the Labor Department is teaming up with the American Job Centers in each state to seek out homeowners who are out of work and informing them about unemployment forbearance, a provision of HAMP that allows up to 12 months of suspended mortgage payments while borrowers look for jobs.
3 – The Housing Counseling Office
Consumer debt issues can easily become detrimental to housing situations when they go unchecked. Through a new initiative by the Department of Housing and Urban Development (HUD), Americans will be able to get information and assistance on a number of credit issues that can affect their housing situation, from mortgages to lease contracts and from avoiding scams to investigating fraud. These all-in-one Housing Counseling Offices are a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act.