An Americans Guide to the 2009 Government Mortgage Assistance Payments and Help Programs

The recession has caused the government to pass a lot of spending bills in this year of 2009. The intent of the bills is to help people who own homes avoid foreclosure. If you’re a homeowner, you should know about the government programs that will assist you with your mortgage.

The government programs were announced in February of 2009 and are part of the Homeowner Affordability and Stability Plan. This plan is complicated and can be difficult to understand. The reason is because there has been a lot of press conference, there are many programs that sound the same, and there are a lot of cryptic acronyms.

To help you make sense of it all, we have put together this helpful article which will explain the mortgage assistance programs. You can see if you’re eligible for these programs by clicking on the links in this article. We’ll begin by providing you some background information.

On February 18, 2009 mortgage assistance was announced by President Obama when he unveiled the Homeowner Affordability and Stability Plan. The program will provide about $75 billion in assistance to struggling homeowners.

This government mortgage assistant program is designed to accomplish two goals. First, it will help some homeowners avoid foreclosures this year and for years to come. Second, it will help current homeowners refinance their mortgages so they make less payment every month by using fixed-rate loans. So this program helps people modify existing mortgages and refinance their homes.

The above picture demonstrates that if you qualify for any program, how you’re paying your current program shows which program you’ll be able to use. The first option is for people who have not been able to keep up with their monthly mortgage payments. The second option is for people who are current on their monthly mortgage payments.

This article will provide in depth information about both options.

First Option – Loan Modification

This option is designed to help if you haven’t been able to keep payments current on your existing mortgage. You should also consider this option if you think you’re going to have problems meeting mortgage obligations in the near future. Here is some more information.

• If you are not able to keep up with your monthly mortgage payments, you might be able to work with a lender to get the terms of your mortgage changed.
• Your lender should be able to reduce how much money you’re expected to pay every month, helping you avoid foreclosure. This benefits the lender as well as you. You get to keep your home and the lender avoids having to go through the foreclosure process.
• Your monthly mortgage payments would only be about 31% of your gross monthly income. Most of the time this is accomplished by reducing the interest rate, allowing you to pay off more of the principal.
• Your decrease in monthly payments would only last a certain length of time. Most of the time, it will be five years. After the time period is over, the monthly mortgage payments would slowly increase to be equal what it was at the time the mortgage was modified.
• Homeowners and lenders both have motivation to participate in this government mortgage modification program. If you are able to make your monthly payments on time, you may be eligible for a reduction in your principal balance. Over the 5-year modification period, you could cut $5,000 from the amount you owe on your home. Lenders benefit by qualifying for incentive payments for each loan they successfully modify.

• In order to be eligible to take advantage of this program, the amount of money left owing on your house without interest needs to be less than $729,750.
• The program is designed to help people who have their homes as the primary place where they live. Speculators and investors will not benefit from the plan.
• After December of 2012, nobody will be able to become eligible for this part of the mortgage assistance program.

What is my next step? Contact your lender to see is they are participating in this mortgage assistance program. Go to the government website at Financial Stability.gov for more information.

Second Option – Mortgage Refinance

Suppose you are able to make your monthly mortgage payments, but you can’t refinance because the value of your home has gone down. In that case, you could get help under the mortgage refinance option of the mortgage assistance program. Here is some more information.

• This part of the government mortgage assistance program opens the door so more people can take advantage of refinancing their homes. It will mostly help people who have lost a lot of their home’s value.
• Under normal circumstances, you would need at least 20% equity to be eligible for a refinance. This program helps people with no equity and even those who have a negative equity qualify for refinance loans.
• In order to be eligible for mortgage refinance, you current loan must be owned by either Freddie Mac or Fannie Mae. We have included some links to help you determine if you qualify, or you can just ask your current lender.
• If the value of your property has plummeted too low, you may not qualify for this part of the mortgage assistance program. This has unfortunately has been the case in many areas, especially California. To qualify, you cannot be underwater by more than 5 percent. Even a tiny bit of equity increases your chances of qualifying.
• To qualify for this refinance program, you must be consistently making your monthly mortgage payments. For the past year, you must have been making your monthly mortgage payments within 30 days of the due date.

• If your loan is more than $417,000 then odds are you will not qualify for refinancing. This is what is called a jumbo loan.
• However, if you live in an area with higher property values such as New York, then you may qualify even if the loan is more than $417,000. The loan in this case is called a “conforming” loan instead of a jumbo loan. If you are not sure whether you qualify for assistance, be sure and ask. Click on one of the links we provide underneath this article to find out more.
• In June of 2010, the mortgage refinance option is scheduled to expire.

What is my next step? Find out if your loan is owned by Fannie Mae or Freddie Mac. Ask your current lender or use the resources provided by the Fannie Website and the Freddie website. Go to the government website at Financial Stability.gov for more information.

If you’re having trouble meeting your mortgage obligations, hopefully this article provided you some useful information. As the government plans or changes are made to it, I will update this information. If you have questions about government mortgage assistance programs or other types of homeowner assistance,including assistance with mortgage payments please feel free to contact us through the contact us page.

As the loss in jobs rise, increasing numbers of home owners whose credit was once very solid and stable, are finding themselves behind in mortgage payments, which has served to exacerbate the growing problem of mortgage foreclosures.
The latest in a long line of national real estate disasters has shifted, and not in a positive way.
The shift has been from those who were initially borrowers whose credit was shaky, to those who were considered a prime lending consumer, with a good financial history.
Economist are currently predicting that the unemployment rates will continue to rise, going into double digits expect that the foreclosures will continue to escalate, increasing the losses to America’s financial system and an even broader aspect of the economy.
“We’re about to have a big problem,” said Morris A. Davis, a real estate expert at the University of Wisconsin. “Foreclosures were bad last year? It’s going to get worse.”
“We’re right in the middle of this third wave, and it’s intensifying,” said Mark Zandi, chief economist at Moody’s Economy.com. “That loss of jobs and loss of overtime hours and being forced from a full-time to part-time job is resulting in defaults. They’re coast to coast.”
Incredibly, those who are on a fast track to foreclosure today are more frequently the buyer who has a loan that actually fits their income, as opposed to those who had overstretched their credit with lenient mortgages such as was previously the case.
The experts say that more than sixty percent of the mortgage defaults in 2009 will be brought about by the unemployment, which is up almost thirty percent from 2008.
Buyers whose businesses depended on other business that is currently in trouble, will find themselves out of work and finding work in the same arena in which they are suited is not always an easy task.
Many of these buyers will work with their banks in an attempt to cut payments and work out a feasible solution but more and more, bankers are unwilling to consider other options aside from foreclosure.
From November of last year, until February of this year, 2009, the number of what are considered prime mortgages that were more than ninety days past due or were in preforeclosure increased more than 473,000, and now sits as well over 1.5 million in number in the United States. The total amount owed by these buyers is more than 224 billion dollars all things considered.
A program which was announced in February by Obama’s administration permits the government to spend about 75 billion on mortgage servicing company incentives that may help to lower payments for those home owners who are in trouble and may assist about four million homeowners, preventing foreclosure on their homes, however now, more than three months after the fact, that program seems to be less than a quick fix as it was touted to be.
A spokeswoman from the Treasury Department states that the number of loans modified under this program was “more than 10,000 but fewer than 55,000.”
In the first two months of2009, an additional 313,000 mortgages ended up in foreclosure or became more than ninety days delinquent,  according to First American CoreLogic.
“I don’t think there’s any chance of government measures making more than a small dent,” said Alan Ruskin, chief international strategist at RBS Greenwich Capital.
Among the prime borrower increases, those foreclosure rates are growing the fastest in the states which have some of the higher unemployment rates, including California, Nevada and Minnesota, while borrowers are having trouble persuading their mortgage companies or banks to work with them to reduce their payments and prevent foreclosures on their homes.
In a struggling economy, with unemployment on the rise, it appears that the banks have not yet gotten on board and begun to work with consumers instead of against them in an effort to save both mortgage company and consumer time, effort and money.

Problem Signs that you Can’t Ignore

Are you having trouble keeping up with your Mortgage and Loan payments?Have you received a notice from your lender asking you to contact them?

What you should do
* Behind On Your Mortgage? Modify Your Loan and Keep Your Home.
* Don’t ignore the Notices from your Mortgage Lender
* Contact your Mortgage lender as soon as you are able, Prepare a list of things you can say to them
* Contact a HUD-approved Housing Counseling Agency Toll FREE (800) 569-4287

1. Whatever you do, Don’t ignore the problem.

The further behind you become
the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your Mortgage lender as soon as you realize that you have a problem with Making the Payments.

Lenders do not want your house. The Government will be helping them to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender.

The first notices you receive will offer good information about foreclosure prevention options that can help you through financial problems. Or important legal action. Your failure toaddress the issues will not help you in foreclosure court.

4. Know your mortgage rights.

Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws and time frames in your state (as every state is different) by contacting the State Government Housing Office.

6. Contact a HUD-approved housing counselor.

The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287

7. Prioritize your spending.

After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other “unsecured” debt until you have paid your mortgage.

8. Use your assets.

Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

Government Refinance Programs for Retirees

Retirees, that are homeowners, are struggling to make their mortgage payments because they are living on a smaller income. The Obama administration has formulated a financial stability plan, to get the economy back on track and help improve the state of the housing market. The Home Affordable Refinance program will give up to 4 million homeowners, including retirees, a chance to refinance their mortgage to make monthly payments more affordable.

The Hope for Homeowners Program was created by the government as a option for homeowners, who are at risk of foreclosing or cannot afford their current mortgage payments. Retirees that are facing hardships can refinance their mortgage into an affordable loan. Government backed refinance loans are a good option for retirees with a credit score below 700 and they don’t have much equity in their homes.
There are two loans offered by the government under the Home Affordable Program. They are the Home Affordable Modification Program (HAMP) and the Home Affordable Refinance Program (HARP). These programs offers incentives for lenders to reduce mortgages so they are more affordable to homeowners.
The Home Loan Modification program is an excellent resource for retirees that owes more money on their home then the current market value. Loan modifications reduces monthly payment by lowering the interest rates or extending the loan. To qualify for a modification loan, retirees must document proof of income and financial hardship. The home must be their primary residence. The Homeowners refinance Loan Program is available to retirees with an existing Fannie Mae loan. The loan is offered to responsible homeowners and reduces their monthly payments by lowering interest rates on the loan. To qualify, homeowners should be current on their mortgage payments.
These two loan programs was implemented by the Obama administration to help homeowners stay in their homes and to fix the current state of the housing market. These programs are a temporary solution offered by the government. These two government backed programs expires on June 10, 2010.
The FHA Streamline Refinance Loan is another option offered by the government. Retirees can utilize this loan to reduce their monthly payments by a getting lower interest rates. A streamline loan is an easy and quick procedure. There is usually no appraisal and credit check. This reduces the paperwork needed to process the loan. The original loan must be an FHA loan and you must be in gong standing with your lender.
Now is a good time to take for retirees to advantage of government refinance loans, before time to apply expires. Information on refinance loans for retirees can be found on the Department of Housing and Development website, under the category, information for senior citizens.

Refinancing an Underwater Jumbo Mortgage in 2010

With all of the fluctuations of the real estate market lately many people are finding themselves owing more on their mortgages than what they would be able to sell for, this is known as being underwater. Some estimates conclude that more than 21% of homeowners are upside down in their homes. The Obama administration is trying to help homeowners and introduced a program called "Making Homes Affordable". Most homeowners assume that these programs are not for them, however there are several programs out there so if your underwater on your mortgage it would be wise to check into all of the programs available. The "Making Homes Affordable" program has the following criteria:
Your Mortgage is equal or less that $729,570

You are having trouble paying your mortgage. You’ve had a reduction in your income since you got your loan, or
you’ve had a increase in your mortgage payment, or you have suffered a hardship that has increased your
expenses.

• Your home is your primary residence.
• Your first mortgage payment is more than 31% of your gross income. This can include your principal, interest,
  taxes, homeowner’s association dues, and insurance.
• You can find more information on this program at www.makinghomesaffordable.gov.

Late in 2009 several of the large banks began to roll out fixed 30 year Jumbo loan programs at low interest rates. The catch is that they are only for low risk borrowers, and some require as much as 30-40% down payments. All of these terms make these loans inaccessible for refinancing by owners in a current Jumbo loan that is upside down. If you realize you are not eligible for any of the government programs aimed at helping homeowners, your next step will be to contact your loan company. From combing internet forums of borrowers who are upside down in their loans follow up any call you make, even if you feel it was unsuccessful with a well thought out letter. With some persistence you may have luck convincing your finance company to modify your loan terms so that you can keep your home. Remember you are in no way alone in this, many Americans are seeking the same assistance you are.

Obama’s Mortgage Plan Warning

The Obama Administration’s $75 billion foreclosure prevention program saw just 12% of homeowner participation as of late 2009, with nearly 1 in 12 either in foreclosure or having fallen 90 days or more past due. A coming government paperwork submission deadline for homeowners currently accessing the federal foreclosure prevention plan could disqualify thousands. Of the 900,000 mortgagees that have attempted to enter the program on a trail basis, only 7 percent have actually been granted permanent modifications according to the Treasury Department.
To enter the federal foreclosure prevention plan, mortgagees must present a hardship affidavit, along with all other mandatory paperwork, plus make three consecutive god-faith payments to further qualify for a long-term mortgage modification. But an estimated 15 percent of homeowners attempting to access the Administration’s foreclosure prevention program are highly unlikely to be able to meet the terms of the modification.

The program, launched in February 2009, has been laden with government red-tape; as a result, many banks have extended provisional term modifications verbally but have difficulty completing and submitting requisite documents to formally finalize the modification. Mortgagees are therefore turning to bankruptcy protection, short sales, transferring a deed-in-lieu or are electing to simply walk away.
Though the Obama Administration has extended the paperwork submission deadline to January 31st, Assistant Treasury Secretary Michael Barr has stated the new deadline will not be further extended. As of December 2009, over 46 thousand mortgage modifications have been formally approved but await the mortgagee’s signature, while nearly 67 thousand of qualified homeowners have already received modifications.
According to the Treasury Department, approximately 25 percent of borrowers that have qualified trial modifications will not remain in the program because of an inability to make the required three payment provision. Of those borrowers granted a mortgage modification, average monthly payments have been reduced from over $1,400 to $830.

Wells Fargo, J.P. Morgan Chase, Bank of America and Citigroup have a combined total of 23,746 successful permanent mortgage modifications with still another 31,664 modifications pending. But a full 10 percent of Wells Fargo customers that qualified for provision relief and have made the three trial period payments have not submitted the necessary documentation, while approximately 15 percent have provided only partial documentation, in either case, those borrowers are not likely to meet the January 31st deadline set by the Obama Administration; an estimated 50 percent of homeowners entering Wells Fargo’s trial modification program to eventually receive a permanent modification.
Though the administration asserts their foreclosure prevention program will benefit as many as 4 million homeowners and is contemplating more assistance for borrowers and incentives for banks to reduce the level of foreclosure to aid homeowners and financial institutions alike. A conversion drive has already been launched by the administration to aid in increasing approved mortgage modifications. More plans to aid borrowers are in the works, but the administration has yet to make public specifics. Borrowers that are unemployed or underemployed are likely to be included in future provisions, but must also meet minimum standards.

Low Rate Mortgage Help

For the last 30 years, the news has been flooded regarding the record low interest rates being applied to 30-year fixed-rate mortgage loans. The rates were close to 4.5 percent just last year and are now nearly 5 percent. The major problem with this is that when a borrower calls a mortgage lender to get this amazing rate, he or she is often turned down.

This rejection is because most borrowers have credit scores that are below today’s ‘prime’. Experian puts the average score at 771 on a scale from 501 to 99. FICO, who developed the scores used to assess credit risk, says the median is 720 on a scale from 300 to 850.
Under today’s guidelines of Fannie Mae and Freddie Mac, only those borrowers with scores of 740 or more and a down payment of at least 20 percent are able avoid extra charges on a loan that could possibly raise the interest rate. These two government agencies set standards for most mortgage lending in the US.

Borrowers who have credit scores between 700 and 740 usually see additional charges, which is normally one to three-quarters of a percentage point of the total loan amount. This amount can either be paid up front or worked into a higher interest rate.
In 2008, Fannie Mae and Freddie Mac begin raising prices on higher-risk borrowers. For example, scores that fell between 680 and 700 were charged one percentage point when applying a down payment of 20 to 25 percent. A spokesman for Freddie Mac says this risk-based approach to pricing protects against losses from foreclosures.

The chief executive in Bellport, NY of the Safe Harbor Capital Group, Michel Raab-Francis, states that a score of 680 is common for people who have several credit cards with high limits. If a borrower is able to put 20 percent down on a loan, has 10 years of strong employment, a savings, a 4o1(k) and a credit score of 680 should not be penalized based on the credit score alone.
Even with these changes, there is still hope for mortgage loan borrowers. Fannie Mae and Freddie Mac are slowing down the pace at which they are applying more penalties on borrowers with lower scores. The average credit score with Fannie Mae or Freddie Mac was 758 in the last quarter of 2009, this is down from 761 in the third quarter.

 

According to federal data released on Friday, 66,000 borrowers benefited from President Obama’s administration’s $75 billion program which was aimed to protect homeowners from foreclosure.  All 66,000 of the borrowers have received permanent loan modifications and lowered interest rates, which represents a vast improvement of the number of loan modifications under Obama’s plan.

While the numbers appear to be improving and lenders appear to be more willing to refinance existing loans, the program still appears to be a failure.  The 66,000 loans refinanced accounts for a very small percentage of Obama’s goal of three to four million loans to be refinanced by 2012.  This is especially disappointing considering the cash incentives that the administration is offering to lenders who are willing to refinance their borrower’s existing mortgages.

 
The Home Affordable Modification Program needs to find new success or else the country could be looking at a new round of rampant foreclosures.  Nearly four million Americans have lost their homes to foreclosures or short sales in just the last two years.  Another fifteen million homeowners are estimated to owe more on their mortgage than their home is presently worth.

For the time being, the federal government plans to continue with the Home Affordable Modification Program, which does appear to picking up steam.  Both the Treasury Department and the Department of Housing and Urban Development (HUD) have announced that they were working to convert trial loan modifications into permanent modifications.

According the federal sources, at the end of December there were over 850,000 homeowners who were active in the loan modification program each of which were experiencing, at least temporary, payment reductions of $500 per month.  Of those 850,000 participants, 92% were on trial modifications while the other 8% had received permanent modifications.  HUD reports that an additional 46,000 borrowers are near receiving a permanent modification offer.

All of the successful loan modifications have lead to a decrease in interest rate.  43.2% of the successful loan modifications have also lead to an extended repayment period.  While reduction in principle owed is quite expensive, 26.6% of borrowers have received a reduction in loan principle.   

The government also plans to fully support Fannie Mae and Freddie Mac, which will allow the two companies to keep interest rates low, refinance mortgages, and provide tax credits for housing development.

Short sale advice: the long an short of it

With foreclosures at their highest level in many years, homeowners trying to escape mortgage default are opting for alternatives to losing both their home and credit score. As a means of avoiding foreclosure, home owners do have options, some more attractive than others:

Reinstatement is one option which the lender allows the mortgagee to make the arrears and any attorney’s fees and costs to bring the loan current; thereafter, the mortgagee must stay current.
PMI (Private Mortgage Insurance) or Lenders Mortgage Insurance (LMI), is insurance payable to a mortgage lender that is usually required when a mortgagee takes out a loan. Should the borrower be unable to meet their obligation and pay back the loan, PMI or LMI insurance will make up for the shortfall if the mortgagor is can not recuperate its costs after a filing a foreclosure action and subsequently sell the property.
As a last resort, borrowers may be able to voluntarily "give back" their property to the lender (known as a deed-in-lieu). While this option will not allow them to keep their house, it is not as damaging to their credit rating as a foreclosure.
If your home is worth less than the amount you owe, you might be a candidate for a short sale. A short sale affects credit but it’s not as bad as a foreclosure. You or your real estate agent will need to negotiate with your lender to find out if the lender will cooperate on a short sale. This is called a pre-foreclosure redeemed and allows mortgagees to avoid foreclosure by selling their property for an amount less than the amount necessary to pay off their mortgage loan.
Mortgagees may qualify for a short sale if:
1. The loan is at least 2 months delinquent;
2. You are able to sell your house within 3 to 5 months; and
3. A new appraisal (that your lender will obtain) shows that the value of your home meets HUD program guidelines.
Contact the lender for their short sale guidelines; once they agree to a short sale, add up all of the costs associated in selling your property – this includes real estate commission, closing costs and any other loans or liens against the property. You can determine closing costs through your real estate agent, or if you are selling the property directly as the owner, phone a local title company for an estimate.
Take the total owed on the property with the selling costs and subtract that amount from the estimated sale price (in a short sale, this will show as a negative amount) but keep in mind, the IRS will regard the sale of your home as income and tax you accordingly. Mortgagees that can afford the taxable income should note that a short sale or deed-in-lieu will be recorded on their credit. Moreover, there is no guarantee the lender will not pursue legal action against the borrower for the difference – bankruptcy can clear the slate at least if no workout is possible

2010 Mortgage Reduction Programs

The real estate industry has been hit rather hard with foreclosures and we have seen, or heard of some one who have been affected with this problem. However, President Obama has outlined what is termed the Homeowner Affordability and Stability Plan(HASP)-and from the new administration’s strategy for curbing foreclosures. Since, President’s Obama’s mortgage modification strategy, one of the (HASP) its’ sub component,is the Home Affordable Modification Program( HAMP) which is a loss mitigation tool upon which to measure how effective economists’ and lawgivers’ can assess the real estate industry’s efforts to keep borrower in their homes while curing the ranks of foreclosures affecting the economies of scale globally.

The 2010 Mortgage Reduction Programs, these are government programs which offer the borrowers some relief. Even Fannie Mae has bought out of its retirement its HomeSaver Forbearance(HSF)Program and replaced it with its newly introduced Payment Reduction Plan(PRP). The goal of Fannie Mae’e and its (PRP)Payment Reduction Plan is to maintain the borrowers payment streams who have encountered long term financial hardships and who are exploring permanent alternatives fo foreclosure. (Agency Updates).

Although, the PRP program might not pay or offer the borrowers out-right cash to make towards their mortgage payments,however,Fannie Mae’s PRP program can reduce the borrower’s monthly principal and interest.The (HSF)Homesaver Forbearance Program is limited to only owner-occupied properties. On the other hand, the PRP allows for reduced payments on non-owner occupied properties.
Under the HSF,the mortgage servicers receive incentive payments under this new program.However, unlike the HSF, the PRP payments are issued upon successful completion of a permanent foreclosure prevention alternative.
In addition, few  governmental HAMP mortgage servicers who have initiated in trial modification are:

• Saxon Mortgage Services,
• Citi Mortgage
• GMAC
• Auroa Loan Services
• JP Morgan Chase, and
• Nationstar Mortgage

These participatory agencies have performed trial mortgage modification and offer trial-periods plans. The homeowner benefits include reduced monthly mortgage payments with the continued opportunity of the borrower staying in their homes. While the 2010 mortgage reduction programs does not offer cash to the borrowers,the mortgage reduction programs has impacted those borrowers hard- hit by the housing crisis. But there is more work to be done!

 

2010 Mortgage Assistance Outlook
During this financial crisis America’s housing market has been able to be used to predict what the general market will do. In 2009 the market went up some due to the home buyer’s tax credit. This credit gave first time home buyers up to eight thousand dollars tax credit if they bought at home before the end of 2009. The housing market rose due to this stimulus that congress passed but gave the market false hope. Clinging on to hope senate voted 98-0 to extend this tax credit for first time home buyers until April 30, 2010. This tax credit also extended a tax credit to existing home buyers for $6500 to encourage them to buy another home.
What do existing homeowner’s have to look forward to?

The housing market does not look good for existing home owner’s houses during 2010. Even with the home buyer’s tax credit and low mortgage rates fueling sales home prices flattened in October 2009. This was due to the 3.2 million new and existing unsold homes in America which has created a seven month supply of homes for buyers.

Predictions for 2010 Housing Market
Many predict that the financial crisis will not improve until the government stops stimulating the economy and allow the economy to take its natural course. These stimuli are slowing down the economies full recovery because of the false rises in the market they are creating. After April, 30 2009 there will most likely be another dive in the market due to the false rises. This year there is an estimated 2.4 million homes that will be foreclosed on and added to the dive which will drive down prices another 10 percent. Only then will the market start to improve on its own without any help from the government.

Another Decline in the Future
The next decline in the market could mean worse times for an estimated 16 million homeowners. Many homeowners owe more on their homes than they are worth. If this happens than many homeowners are likely to allow their homes to go into foreclosure and seek cheaper rent at another residence. Lender’s could prevent this by lowering the principal balance of these mortgages which would give the buyers lower monthly payments. This will prevent the lender from having unnumbered houses sitting empty on the market and allow homeowners to stay in their current home paying less, but many lenders refuse to take this immediate loss on the loans they have extended. Congress has attempted to change the law so that bankruptcy will force lenders to reduce the mortgage balances for borrowers, but lenders have been able to avoid this law and stop from being forced into this resolution.

Is there A Hopeful Future?
Although the economy is hard pressed the future will start to look brighter. There are many different approaches the government could use to help improve the financial crisis. The government should focus on job creation to combat the rising unemployment rate which in turn will allow the housing market to improve as more and more American’s earn a steady pay check.

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