Ask the experts • Defining Homes

Posted on 08 Oct 2010 at 9:00am

Ask the experts

In March 2009, President Obama released the Home Affordable Modification Plan (HAMP). This would help alleviate the pressures of potential foreclosure, lowering monthly payments and still maintaining good standing in credit. But according to RealtyTrac.com’s list of foreclosure hotspots, Dallas/Fort Worth ranked 96 out of 203 with (at the time) more than 10,000 properties listed as foreclosures — a relatively small number considering the populations of both Dallas and Fort Worth. But it does make us ask the experts, “What does Obama’s mortgage aid plan mean for homeowners here and can it help those in search of buying their first home?”

Randy Hodges
Randy Hodges

Randy Hodges,
Dave Perry-Miller InTown
First of all, the federal government’s making homes affordable plan really has helped countless numbers of American families keep their homes. It’s important to note, however, that the programs being offered by the federal government should not be mistaken for a “hand-out.” Rather, these programs offer Americans, who are struggling to avoid foreclosure, the opportunity to restructure their debt by guaranteeing certain aspects of the lending process. The positive in this is that will all be to the benefit of both the homeowner and the lender.

Tomi Kuczynski,
Prudential Texas Properties’ Homes On Call
One of the first glitches I find in the plan for most Dallas/Fort Worth homeowners is the requirement of a loss of at least 15 percent in their home’s value. Most areas throughout the Metroplex have not suffered such losses in value. There are areas such as Preston Hollow, McKinney and Oak Cliff where the numbers neared 20 percent, but these areas have already begun recovery in the market. Furthermore, analysts predict the actual number these lenders will be seeking is closer to 40 percent. If this prediction is true, areas throughout California and Florida will be the benefactors of this relief plan, not the Metroplex.

Each plan has been implemented primarily to prevent foreclosures, which is my second concern. Both plans require homeowners to be up-to-date on their mortgages to qualify. I consider this to be one of the main failures within the first attempt of this plan, and will continue to be a deterrent in providing relief to those who are truly in need for Obama’s second attempt. While they struggle to find an answer, they will not be able to look to this new plan for help without being completely current.

Jeff Updike
Jeff Updike

Steve Shatsky,
Prudential Texas Properties
I think that the greatest impact of the latest mortgage aid plan is that it will keep some percentage of homeowners in their homes rather than displacing them and putting more distressed inventory on the market. In some parts of the country there is excessive inventory and a large percentage of that is distressed sales, so anything that helps keep people in their homes, which helps to lower inventory levels, will also likely aid in stabilizing property values and help them to begin to climb again. Here in Dallas we have a good amount of inventory and that, combined with excellent mortgage rates, already makes it a great time to buy a home regardless of any impact from the latest mortgage aid plan.

Jeff Updike,
Re/Max Urban
We are extremely fortunate because the mortgage delinquency rate in Texas is less than half of the national average. The HAMP and the Home Affordable Foreclosure Alternatives (HAFA) programs will help a small percentage of delinquent borrowers refinance to a permanent mortgage that will help them stay in their home.  For most others, if they cannot make the payments because of unemployment or underemployment, they will probably be forced to sell their home through a “short sale;” otherwise, it may be lost in foreclosure.

Barbara Stone

Barbara Stone

Barbara Stone,
Allie Beth Allman & Associates
If the plan is successful, it will reduce homeowners’ mortgage payments (those homeowners who have been affected by the economic crisis through no fault of their own), and help them stay in their homes instead of being foreclosed; thus reducing the number of foreclosures nationwide.  Another benefit homeowners would realize is a better credit rating, rather than having a foreclosure reflected on their credit report.
And if homes are not foreclosed on, there will be a better chance for these homes to be kept in better condition, rather than being vacated and left untended. If these homes are put on the market, then homebuyers will benefit with a better quality home to purchase.
The Obama mortgage aid plan could also help boost the value of homes and neighborhoods by keeping lower-priced foreclosed homes out of the market. If values stay stronger, then discouraged potential sellers will consider putting their homes up for sale, instead of waiting for the market to rebound. Homebuyers will then have a larger selection of homes to choose.

For more information on the  HAMP  and HAFA programs, visit 2010mortgagerecoveryplan.org or MakingHomeAffordable.gov.

This article appeared in the Dallas Voice print edition of Defining Homes Magazine October 8, 2010.

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