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Obama's Home Affordability and Stability Program - Drawbacks and Pitfalls Business Articles | March 12 J.J. Watt Youth Jersey , 2010
Financial experts are skeptical about the plan, since not many American have benefited from the program. According to the predictions, the program was supposed to address approximately 3.5 million foreclosures and loan modifications by the end of 2009. However, findings indicate the program was able to help less than 150,000 applicants for loan adjustment Cullen Gillaspia Youth Jersey , even after five months of its inception.




The federal government has acknowledged the fact, and agrees a lot more needs to be done to make the loan modification programs really effective. According to the official sources, mortgage service providers and lending institutes need to spend less time dealing with the paperwork, and make the rules attractive and flexible enough to suit the loan applicant. There is a growing concern, and a certain degree of frustration regarding how moneylenders process the HASP loan applications - a fact which was expressed specifically by Senator Jeff Murkily. Financial experts and policy makers are still trying to figure out what has gone wrong Kahale Warring Youth Jersey , and where. Some of the reasons which make the plan less effective are explained briefly:

* The plan was announced in February, and thereafter it was difficult to motivate the loan modification companies, moneylenders and lending institutes to hire specialized staff trained in explaining the guidelines, and helping the loan applicants find a practical and effective solution that deals with their actual debt problems. The incentives failed to persuade the lenders in providing the loan alteration facilities, since they were not substantial enough.

* While implementing the loan modifications Max Scharping Youth Jersey , the credit institutions started recorded losses, since the process was handled very slowly and without any impetus. In spring, the Congress was forced to hear strong pleas from the representatives of the mortgage industry, requesting the federal and state governments to allow the mortgage losses to be recorded in their account books. The incident resulted into bad publicity for the HASP plan, and potential applicants became more skeptical about availing the loan modification facility Lonnie Johnson Youth Jersey , since they thought their applications would not be entertained in the right manner.

* The Congress passed the bill in May, which enabled the home loans modification services providers with more freedom and flexibility while providing the credit to the individuals applying for loan. However, majority of the insurance companies failed to comply in reassessing the existing mortgage values and make it more compatible with the HASP plan. This made it difficult for the loan providers in providing the required flexibility to the applicants, since mortgages provide them with the protection against possible loan defaults.

* Experts feel the HASP plan is far more complex than originally thought, and it is going to be difficult to implement it effectively. The borrower needs to know and understand the guidelines properly to benefit effectively from the program. One of the major objectives of the plan is to avoid foreclosures. However Tytus Howard Youth Jersey , there are not enough trained personnel who can guide the applicants in working out the modification as per the debt incurred by the borrower.