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What Obama Mortgage Plan 2010 Needs To Target?

President Obama inherited these issues when he assumed his responsibilities, and his desire to provide a suitable and effective solution to the mortgage related issues, and to improve upon the American economy resulted into a new mortgage plan - the Homeowner Affordability and Stability Plan or the HASP plan, and the Obama's Loan Modification Plan. These plans initially looked good on paper, and Americans had a lot of hope and many expectations from the reform programs. However, as on today, the ground reality is different, and findings as well as economic reports submitted by several credit agencies and financial research institutes indicate that the conditions are not that good since fewer individuals and debtors have actually benefited from the plans. The article discusses a few of the findings submitted by reliable financial agencies.

Obama's plan does not encourage health insurance benefits

One aspect becomes quite clear while analyzing President Obama's loan modification programs and other health-care related plans - the health care program does not include any specific control or offers any significant benefits to decrease the health care costs, or even make health care affordable. No market mechanism exists which can encourage the health care insurance providers to offer competitive prices, or set up competition which can reduce the medical bills and provide quality facilities to patients ailing from illness, undergoing prolonged medical treatment, or who require medical services for longer durations. Lack of initiatives force the medical insurance providers to keep the premium amounts high, thereby making it difficult for citizens not qualifying for federal and state governments' health programs to afford the medical insurance. President Obama's initiative fails as far as medical insurance benefits are concerned.

Obama mortgage plan to help California and 4 other states

President Obama's new steps for preventing home foreclosures through the Obama mortgage modification program and decreasing the bankruptcy filings in Nevada, which actually ranks first in foreclosures since last 37 consecutive months, fails to reduce the monthly mortgage payments as intended, and people still find it very difficult in redeeming their mortgage loans, even today. As per the policy, approximately $1.5 billion were used to bailout the banks and several credit lending institutions in other states such as Arizona, California, Florida, and Michigan. In addition, a certain percentage of the bailout fund was to be utilized for providing financial assistance to homeowners who have lost their jobs, and to individuals who do not earn enough to make their monthly mortgage payments. Obama's plan fails to effectively address some of the fundamental mortgage related issues in some of the states.

More homeowners being rejected under Obama's loan plan

Banks and credit lending institutes providing mortgage loans to homeowners try to make it easy for the householders to redeem their borrowed credit, however in case of consistent defaults of monthly payments; these institutes take recovery steps to get their capital back. In such circumstances, they often initiate loss mitigation to prevent the home owner from filing for bankruptcy. One of the ways to modify mortgages and support the mitigation process is to refinance the existing mortgage, and avail more favorable loan terms and reduced monthly payments so it becomes easy for the debtor in supporting the monthly mortgage repayments. Obama's HASP plan has been specifically designed for this to happen. However, it is seen that many debtors applying for the benefits under the plan fail to qualify for the program. One of the main reasons why this happens is because the qualifying criterion is tough, and private moneylenders do not benefit significantly while providing the facility.

The government is not taking the required initiative in making the qualifying rules flexible and making mortgage redemption easy. Obama mortgage plan 2010 is expected to improve upon these drawbacks, and make HASP more effective.