Law makers urge Secretary Paulson to help homeowners, as they accuse Paulson of being unclear about his goals regarding the bailout, and not having a so called “exit strategy.” Secretary Paulson recently announced that he was no longer going to purchase bad mortgages, but move to credit card companies and student loan issuers. This move has lawmakers very upset as they say that, “clearly, part of this was not just to stabalize but to reduce foreclosures, for good economic reasons.”

Sheila Bair has also warned that if the government does not take additional actions that there will be about 45 million foreclosures, which could end up costing the government and the economy much more then they are ready for. So, Secretary Paulson, don’t forget about the homeowners.

The Federal Government has created several programs to help homeowners facing foreclosure, their newest program, introduced by the Bush Administration, is concentrated on mortgages backed by Fannie Mae and Freddie Mac. Due to the size of these companies this program has the potential to reach millions of struggling homeowners, but as many government programs this one appears limiting.

To qualify for this program you must have a mortgage backed by Fannie Mae or Freddie Mac, and you must also be 90 days behind or more on your mortgage. Even if you fall under these two categories you may still not qualify for help.

If you have a low income, high amount of equity in your home or if your home’s current market value exceeds their mortgage balance by more than 10%, you are considered too well off to qualify for this program. Once again the plan that is created to help many, in reality can only help a select few.

Secretary Paulson announced this morning that he is shifting the focus of the bailout. The bailout was originally designed to buy back trouble mortgage loans, but now Paulson wants to look to credit card, student loan, and car loan companies.

Paulson explained that there is a little less then half of the $700 billion which has not been assigned, and he said the remainder, should be used to reinvigorate the market for credit cards, student and auto loans — which combined account for some 40 percent of consumer credit.

Although Paulson is shifting the focus away from buying up mortgages he has said that he has pledges to intensify government efforts to help at-risk homeowners, he explained that his aides are examining strategies to mitigate foreclosures.  

Mountain House, California is an example of the most drastic of housing crashes. Almost 90% of the homeowners in Mountain House owes more on their mortgage then their home is worth, on average by $122,000.

Typically people do not pay close attention to the value of their home as long as they can make their payments, but when there is such a drastic decrease in the amount, when your home loses 50% of its value it is cause for worry. As a consequence people are cutting back on their spending, consumer shopping slows, the economy slows, more people lose their jobs, and it spirals down.

Mountain House is a mirco example of what is happening financially with the country as a whole. So once again we must look to the root of the problem; the housing crisis.

Now that the election has come to end, homeowners who are facing foreclosure look to President-elect Barack Obama to see what solutions he may hold for their predicament. Many have said that Obama’s first task at hand is to fix the economy, and most agree that this begins with the housing market.

On the Campaign trail in early October, Obama said he wants to put a 90 day hold on all foreclosures, giving lenders more time to work out a loan modification or repayment plan with those homeowners who are working hard to keep their homes. Recently The New York Times reported, that Obama hopes to “empower bankruptcy judges to ease the terms of home loans on primary residences.” It is certain that this issue will be on the top of the list for the newly elected Obama.

It is feared that the countries foreclosure crisis is going to play an unwanted role in this upcoming election. In the plast two years, more then one million people have lost their homes. With voter registration being based on peoples residence, many could face challenges at the polls.

Some of the hardest hit states in the U.S. are also battleground states in the Presidential race. Ohio, Florida, and Michigan for example have all seen huge numbers of foreclosures, which could be refected in voting numbers and could dramatically change the outcome of the race. Hopefully, a prevalent issue in the Presidential race and the state of our country doesn’t end up phycially changing the results.

More and more Americans are losing their homes as foreclosures continue to reach all time highs. Tracy was about to be another American starting from scratch, her house was up for auction after failing to make the payments following the loss of her job.

Tracy decided to attend the foreclosure auction in hopes of finding closure, that is when she met Marilyn Mock, Marilyn was there looking for an investment property when she noticed Tracy in her emotional state. After hearing her story she decided she needed to help. Marilyn bought the foreclosed home for Tracy and her family. She said she will workout some sort of plan with her on a later date.

Charles E Schumer watching out for homeowners

Today the Seante met to urge bail out officials to do more to help struggling homeowners avoid foreclosure. Many senator feel that the bailout is doing too much to the banks and not enough to help the homeowners.

Charles E Schumer a Democratic Senator from New York said they have been giving the banks “a little too much dessert and not making them eat all of their vegetables.”

Officials involved in the bailout argue that they are reaching out to homeowners. But Senator Dodd says the system is designed to fail. We’ll see if the rescue plan does everything it was meant to do.

Governor Jon Corzine of New Jersey has proposed a stimulus package that includes foreclosure aid. The specifics have yet to be drawn out, but on Meet the Press, Corzine said he would like to help community groups purchase foreclosed homes in attempt to protect neighborhoods that have been hit hard by foreclosure.

In addition to foreclosure aid he wants to create 30,000 new jobs with investments in solar and wind energy. His plan also includes school and highway construction. Just another example of a state heading in the right direction.

Homeowners are not the only people who are effected by foreclosures, many renters have fallen victim to the crisis as landlords fail to tell their tenants that the property will be foreclosed on. Renters in Chicago can breathe a small sigh of relief because under a new law renters in Chicago are entitled to a 90 day grace period prior to being evicted, the 90 days takes effect when the foreclosure sale is confirmed.

Chicago’s Sheriff Thomas J. Dart of Cook County announced last Wednesday that this law would be enacted. They felt that there were a lot of renters being evicted who had no idea it was in foreclosure and they were often dutiful tenants who paid their rent every month. Again local government taking steps in the right direction and helping the people who are hurt the most.