My post yesterday about Congressional efforts to extend unemployment led me to a rather off-the-cuff comment about how efforts to reform unemployment have left those homeowners without a job to face the brutal foreclosure system. And the unemployed homeowners aren’t able to qualify for programs to modify their mortgages because they don’t have sufficient [...]

If you are unemployed and 60 days or more behind on your payments to CitiMortgage, help may soon be on the way, according to the Wall Street Journal. Citigroup is expected to announce a program today to temporarily decrease mortgage payments on loans of $417,500 or less to ~$500 a month for homeowners collecting unemployment. The program for those who have recently lost their job will also waive interest and penalties during the three month period of lower payments.

The program is a great idea, though I wonder about the execution and some of the exclusions. Why does this mortgage modification require 60 days of delinquency and exclude homeowners with jumbo mortgage loans?

President Obama announced his housing plan to avoid foreclosure of homeowners who are currently paying their mortgage but are not likely to be able to do so for long through little fault of their own. The program is also designed to stop foreclosure on homeowners who could afford a lower payment if they could get their mortgage refinanced at current market interest rates. The Obama housing plan is known as the Homeowner Affordability and Stability plan and is estimated to help 7 to 9 million people at a total cost of $275 billion.

Unlike current programs to prevent foreclosure, the Obama housing plan doesn’t require that the homeowner be behind on their payments to enter the program. And for homeowners qualifying under the foreclosure plan, the federal government also will make payments of up to $1,000 a year for five years toward the homeowner. That’s a $5,000 reduction in the principal of a mortgage for simply making your mortgage payment on time every month for the next five years!

For the Americans who have already received a foreclosure notice, and the millions of additional families who are struggling to make their mortgage payments and save their home from foreclosure, the announcement of President Barack Obama’s foreclosure mitigation plan today will either go down in history as the first step in the solution to the housing crisis in the United States, or one more ineffective policy announcement from a federal government which can’t seem to stop foreclosure and arrest declining property values.

Less than a month into his presidency, Obama has been busy. He’s already signed a $787 billion economic stimulus package and set forth his plan for financial stability in the nation’s banking institutions. But the announcement of his housing solution today shows that he understands that he doesn’t have the time to celebrate his victories. The nation is facing rapidly increasing unemployment, a growing national budget deficit, trouble among America’s banks, a bankrupt auto industry, and declining real estate prices.

Loyal readers may have noticed that I haven’t yet done my review of government and lender mortgage modification programs.  It’s not that I haven’t been thinking of issues related to foreclosures.  It’s simply that I’ve been too busy to sit down and put the work into the post that the topic deserves.  I hope to [...]

Absent some breaking news on the credit card front, I’ve decided to spend the next couple of days looking at mortgage modifications and the foreclosure process.  Although this is generally a website about credit card debt, I can’t help but occasionally stray on to the hot topics of the day.  It’s interesting to me, and [...]

Various news outlets reported on Thursday that Democratic Senators and Citigroup had reached an agreement to allow bankruptcy judges to modify the terms of mortgages for homeowners in the bankruptcy process.  The financial industry has previously opposed the procedure, known as “cramdowns,” which force mortgage modifications on debt holders.  The hope is that bankruptcy judges [...]