Recession made borrowing money even harder

The housing market

Back in February of 2009, President Obama addressed a group of high school students about borrowing money and the housing market. At the time, the market was in crisis and the President decided to fix the foreclosure problem with a program set to turn it all around. Unfortunately, that turnaround never came. One year later, an Economy.com survey shows that only about 750,000 homeowners will have received help since that time. It was projected that between 3 and 4 million would be saved from foreclosure.

Borrowing is the issue

According to Mark Zandi of Economy.com, "The more borrowers who can't be helped, the more foreclosed properties will be flooding the market. And that means the nation's housing market, which appeared to recover last summer, could soon take another turn for the worse."

The predictions for the housing market are not good. Many are looking at signs of how the housing plan by the White House didn't work as the reason. According to RealtyTrac Inc., a record 2.8 million households were in default last year and that's up by 20% from the year before. This year they should continue to go up.

Home prices in the mix

Home prices are down by about 30% across the nation, and they are predicted to fall even lower as foreclosures continue to bring neighborhoods' values down. Zandi added, "It is a very serious threat to the housing market, and still one of the most significant risks to the broader recovery."

It's not that Obama doesn't have time to implement the plan. The goal still is to help homeowners in trouble by modifying their mortgages. So far, by using lowered interest rates and longer repayment periods, the average monthly payment has decreased by $500. The modifications require that homeowners have to make three on-time payments in the temporary modification process, and then they can move to a permanent modification. However, only about 7% of the people who signed up for the program has completed it, according to the Treasury Department. … click here to read the rest of the article titled “Recession made borrowing money even harder“