Saving Underwater Homes: How will the White House foreclosure plan affect Realtors?

Republicans and Democrats are pointing fingers as to who's to blame for the nation's foreclosure crisis.

We here at Mojo Selling Solutions don’t wear our politics on our sleeves. It’s not just because our office is a harmonious blend of folks across the ideological spectrum. It’s all about the fact that the telephone sales gods don’t care if the prospect is Democrat, Republican, or Independent.

Nevertheless, we can’t ignore what happens at the White House or Capitol Hill. With the housing market so critical to our economy, every minor burp from Washington matters.

President Barack Obama just announced new changes in the mortgage refinance laws aimed at helping struggling homeowners get more affordable interest rates even if they are underwater borrowers.

The President revealed his plans in a speech in Nevada, one of the most badly bruised states in the recession. An estimated one out of every 118 homes there filed for foreclosure in September. On a pure humanity level, foreclosures ruin lives and dreams. On a Machiavellian level, they ruin neighbors’ property levels.

And on a macroeconomic level, foreclosures hurt America because people without homes or jobs not only can’t buy things, they are also more likely to turn to desperate measures.

Federal changes to the Home Affordable Refinance Program (HARP) will now allow homeowners to borrow up to 125 percent of their property’s value at a lower interest rate — instantly saving them thousands each year. HARP was supposed to expire in mid-2012, but it will be extended until the last day of 2013.

What do you think of the changes to the HARP program?

The Los Angeles Times reports that the current momentum of foreclosures will be tough to slow down.


“In the three months that ended Sept. 30, notices of default, the first formal step in the foreclosure process, jumped nearly 26% from the previous quarter, according to DataQuick, a San Diego real estate information service.

Additionally, a likely national settlement over complaints about banks filing faulty paperwork to take back homes should clear the way for an additional 400,000 foreclosures in coming months, according to Moody’s Analytics, an economics research firm.

Moody’s predicts that foreclosures will rise next year to a record 1.5 million, or a hefty 30% of all sales of previously owned homes.”

Meanwhile, President Obama’s critics charge that his sudden interest in Nevada stems from his election strategy for 2012. Glenn Cook, a conservative Las Vegas Review-Journal columnist, dismissed the new plan as “more taxpayer-backed swag.”

Nonsense, says the Philadelphia Inquirer, it’s better to do something than nothing and rescued homeowners would potentially save $2,500 a year — affecting up to 2 million American families. Those numbers translate to an increase of between $2.5 billion to $7.5 billion in consumer spending each year, the newspaper claims.

So who’s right?

You tell us.  We’re not interested in hearing political rants of any persuasion.

Candidly tell us what really matters. How does the foreclosure rate impact the short-term and long-term real estate market in your community?

(Real estate, insurance and mortgage professionals depend on Mojo for productivity-boosting solutions. Mojo’s Triple Line Power Dialer allows you to contact up to 300 Expired, FSBO and Just Listed/Just Sold leads per hour.)

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Bob Montgomery