Home Affordable Plan - The First Year

In February of 2009, the government introduced Obama's Home Affordable Plan as a measure to reduce the rising foreclosure rate in the United States. It was also that hoped it would stimulate the very slow real estate market, and the general economy, too. What were the results after a year of operation? Has the program been successful or not?

The government evaluated the program's results, and they were pleased overall with the way it had functioned. Statistically, they reported, over one million homeowners received assistance in the form of a loan modification. On the average, they saved over $500.00 each on their monthly house payment. This is aside from the four million homeowners who refinanced their mortgages through the MHA, saving a total of $7 billion dollars.

The official opinion is that the real estate market is showing some positive growth signals. Interest rates are down, and houses are selling again. Homeowners have regained around 12% of their equity during the last three quarters of last year. The program is scheduled to close December 31, 2012.

There is some speculation outside the government that many of these loan modifications through Obama's Home Affordable Plan were in default again within the first year, many within the 90-day trial period. That may be why the government added some assistance for those who miss two payments during their trial period or just cannot work out a loan modification at all. It is called Home Affordable Foreclosure Alternatives (HAFA.) It facilitates short sale and deed-in-lieu of foreclosure agreements to help homeowners walk away with no further loan obligations. There is also funding to help with relocation to more affordable housing.

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