In a report by the Wall Street Journal, federal regulators for the firm stated they would be unwilling to reduce loan balances for homeowners that are underwater unless someone is willing to pay. The Obama Administration has out pressure on banks to reduce the loan balances for people who owe more on their homes than their estimated value to ease the foreclosure crisis. The number of homes being foreclosed has driven down the market values of property.
In a congressional hearing, FHFA’s acting director Edward DeMarco believes writing down loans could cost the taxpayer more in the short term. Those who advocated believe write downs make more sense than modifications which only reduce interest rates and don’t protect homeowners if the economy worsens, according to the Wall Street Journal. DeMarco also believes that reducing loan balances would encourage more people to default on their loans and seek lower balances. Over 2 million homeowners are facing foreclosure and must retain foreclosure attorneys.
There are options available to homeowners facing foreclosure but sometimes those options are unclear unless explained by a foreclosure attorney. Asking for a loan modification cannot always guarantee the homeowner will avoid the foreclosure process. The economy has been trending on the positive side with more jobs being added in the private sector, but is still unsteady so the homeowner is still at risk. Employing a foreclosure attorney when hit by hard economic times may keep people in their homes.
