The much celebrated foreclosure help programs introduced by Barack Obama and the Democrats last year are not working. They are helping very, very few mortgage holders, and the default rates for those who have been helped are still very high. The truth is that the U.S. federal government does not seem to be able to do much about the massive wave of foreclosures that is swamping this nation, and the scary thing is that the real estate market in the United States is about to get even worse. Let's hope that things are not going to get nearly as bad as many analysts are projecting, but at this point, things really, really do not look good.
When Barack Obama first took office, he promised that he was going to get help to homeowners that were struggling with their mortgages. He promised that a program would be set up that would enable large numbers of homeowners to receive long-term mortgage modifications.
So how is that working out?
Well, it turns out that only 168,708 homeowners have received long-term mortgage modifications under Barack Obama's plan as of the end of February.
This represents less than 3 percent of the 6 million borrowers who are currently more than 60 days behind on their mortgages.
What kind of foreclosure help is that?
Not that the mortgage modifications are helping much.
The number of homeowners who defaulted on their mortgages even after receiving better terms through Barack Obama's modification program nearly doubled in March.
So even those who have been helped are defaulting like crazy.
And unfortunately, the foreclosure situation in the United States continues to get worse.
According to RealtyTrac, foreclosure filings were reported on 367,056 properties in March, an increase of nearly 19 percent from February, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005.
Foreclosures continue to surge and there is no apparent end in sight.
So is there any good news?
Interest rates have already gone up, and most experts forecast that they will continue to increase throughout the rest of 2010 and into 2011.
So that means payments on adjustable rate mortgages will continue to go up and even more homeowners will default.
In fact, a massive "second wave" of adjustable rate mortgages is scheduled to reset between now and 2012, and that means that there is likely to be another huge explosion of foreclosures.
Which is bad news for almost everyone - except for those who make their living off of foreclosures.
Let's hope the number of home foreclosures start to go down.
Let's hope there is some good news ahead for the housing industry.
But at this point I would not count on it.