Is Obama's Foreclosure Rescue Plan Working? | Prousalis & Papantonakis, P.C.

Questions, Confusion and Skepticism. That pretty much summed up the public's reaction to the Obama administration's Making Home Affordable program when it launched back in March. Now six months into a program designed to help homeowners struggling with their mortgages keep their homes, those sentiments continue to amplify.

As a practicing real estate attorney, not a week passes in which I am not receiving several phone calls from homeowners frustrated by the runaround they are receiving from their banks. Their stories are frighteningly similar: the bank closed my file even though they had all my paperwork and it keeps happening, the bank approved my modification but the payment they're offering is only a few dollars lower, or my personal favorite, the bank told me that I have to be behind in my mortgage payments in order to qualify. And so it goes on and on and on...

To date the bottom line has been that the banks have been ill equipped to handle the avalanche of applications, and the public has been at an extreme disadvantage attempting to negotiate directly with lenders. That combination has yielded less than favorable results for homeowners. According to a recent Treasury Department report, only 230,000 of the 4-6 million homeowners the program was intended for have successfully modified their loans.

According to the Mortgage Bankers Association, more than 13.5 % of all outstanding loans are currently delinquent or in foreclosure, up from 9% a year ago, and in spite of an unprecedented infusion of capital from the government, banks remain reluctant to provide much needed assistance to homeowners. That much is clear. But what is not clear to much of the public is that there needs to be a different approach when it comes to negotiating with your bank. Simply put: don't go it alone, hire a real estate attorney.

My office assists countless homeowners restructuring their mortgages. We are proud to report that less than a handful of our clients have been denied assistance. The reason is that we understand the programs guidelines and do our own qualification before we ever fax a sheet of paper to the bank. We are also not intimidated by lenders and zealously advocate to prevent foreclosure and keep our clients in their homes.

That does not mean we haven't experienced the same frustrations as homeowners; just last week a lender attempted to deny a file because they erroneously reported a homeowner was paying $15,000.00 per month in medical bills. However, it does mean that we are able to hold lenders accountable, challenge their math skills, and fully advise you of your rights. And in this climate, that can mean the difference between a successful mortgage modification and a denial.