America has gone through a severe recession in the last few years. Consequently, the government has tried to make sure through its initiatives that the people that are close to a default don’t end up losing their homes. Our Foreclosure attorney in Thousand Oaks knows that most of this government money went to banks and other mortgage services to make sure they modified the loan arrangements with the parties to make it feasible for them to pay back.
This, however, seems to not be the case if the reports published by Treasury department’s troubled asset relief program regulator are to be believed. According to the report published by the important treasury department personality, the government spent a whole host of money in the region of $815 million to achieve this purpose. Most of the people that benefited from this initiative have since then defaulted.
The large number becomes all the more surprising when you are made aware that the number of people who defaulted were one third of the total number of people who had their loans modified during the recession time. This is an alarming fact and needs to be taken into account. Any foreclosure attorney in Thousand Oaks will understand that such high rate of default is an indication that the concessions provided by banks and mortgage services were not enough.
Yet it should be noted that despite this fact, most of the banks and mortgage companies continue to hand out the money meted out by the government to protect the large number of people from defaulting their home loans.
Why Couldn’t It Be Stopped?
One of the leading questions in everyone’s mind would be what happened, why were the initiatives by the federal government and the loan modifications not enough? The answer to this question is simple. While the government was quick to take measures to fund the banks to give home loan debtors loan modifications, the banks and mortgage services were miserly in modifying the loans of the soon-to-be default parties, thereby allowing them very little if any relief at all.
According to several financial reports, as of now, the banks and mortgage services have only used up about one fifth of the $39 billion set by the federal government to help those nearing a home default. Yet, the lack of spending means that very few people have been given the chance to save their homes from being taken by the banks.
With the excess unused funds coming back to the federal government, it is important for the federal government to think of the reason hundreds of people were left to lose their homes as a result of their home loan default.