With foreclosures still a major concern for many homeowners, the government’s foreclosure prevention program seemed to be just the ticket. Hundreds of thousands of desperate homeowners have flocked to the program hoping for relief. Considering the housing market is still very fragile and that many more foreclosures could be on the horizon, the program seemed like just the plan to help the housing market realign and set things straight. 
In fact, permanent loan modifications are on the rise and according to CNN Money, over 50,000 homeowners received long-term mortgage modifications in June, bringing the total to 389,198. With a low delinquency rate and most modifications being “sustainable” it appears that the program is working for many. However, on closer inspection, many homeowners were dropped from the program and are still facing foreclosure.
Over half a million people who entered the program have been removed during the trial modification phase since the program began in the spring of 2009. With foreclosure rates holding steady and predicted to rise again by some economists, the government modification program doesn’t seem to be making a dent in the foreclosure debacle. Though families have been helped, many more have been canceled, turned away or simple left to fend for themselves.
Until the unemployment rate returns to “normal”, foreclosure modification may be a wasted effort. Even when some homeowners receive help, loans can only be modified so much, and for those without work, the mortgage may not be a realistic option, no matter how low the rate adjusts. Many facets of the economy will have to regain a strong foothold before the foreclosure issue is resolved and the housing market stabilizes for good.
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Attaining a loan from a bank you already have a relationship with may seem like a logical first choice, and loyalty may have its rewards. Since some banks offer up enticements such as a small discount or an added benefit, your bank may seem to be the best option. If you have a savings or checking account with the bank and you have a great credit score, you will probably receive a competitive quote. You may find this to be easier said than done. The downside may be that without a shining financial record, you could have difficulty securing a loan at all. With the recent housing debacle, banks have tightened up their lending requirements. For example, an FHA loan only requires a credit score of 640, but the bank may require a better score in order to secure the loan. Also, most banks have a limited number of products available, and your bank may not have the right product for your specifications. Perhaps XYZ bank across the street may be waiting with the perfect loan for your buying needs, but you’ll never know about it because you are only dealing with YOUR bank.