Latest White House Plans Will Not Help Only Few Foreclosure Victims

The White House after coming to an agreement with important representatives of the mortgage industry came forth with plan of freezing interest rates for five years. Treasury Secretary Henry Paulson Jr. opined that this would not be beneficial to all. Loan modifications would require certain preconditions –‘financially feasible and necessary solution.’ Paulson further added that the mortgage industry is determined to show results – results counted by not the number of modifications but by the number of foreclosures stalled. A three-point plan was disclosed last month. The Treasury Department had assured cooperation. Positive proactive steps would be taken to reach the borrowers facing foreclosures in making it easier to shift to affordable loans. How much the freeze will help how many is yet to be calculated. Paulson regretted that the plan was not sweeping enough to include every foreclosure victim but it will give a breathing time for lenders and borrowers to work out a viable solution. A record number of people have been hit by the foreclosure tornado, it is overpowering the market and its fall out is going to be grave.

Paulson was speaking at Orlando in Florida is a city reeling under foreclosures, rising payment defaults and delinquencies counter balanced with plummeting real estate market. Paulson will speak again in Kansas, Missouri and Long Beach, California.

Many experts are of the opinion the White House plan has just postponed the matter. The sheer number of foreclosures is telling not only on the economy but also on the society. Abandoned houses, that are no longer homes, are attracting criminal activity. This is making the immediate neighbourhood unsafe for other houses that are not affected by foreclosures. But the threat posed by the unhealthy atmosphere is forcing many to try to sell their houses. This is further adding to the glut in the real estate market – already flooded with foreclosed houses. In literal terms the localities are becoming unhealthy with choked drains and garbage attracting mosquitoes, snakes and frogs. Tax collection is going down while the work of maintenance is going up. Meanwhile the lenders are weighed down with jumbo number of foreclosures – houses that neither fetch in monthly payments nor sell even at a discount. The politicians are alarmed at the number of homeless voters and so all are sitting up to plug the hole in the sinking ship named Foreclosure!

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