Over the weekend 2,000 homeowners attended Home Preservation Day in Van Nuys, California which was a workshop of sorts for homeowners. All of the homeowners in attendance were in one away or another having troubles with their mortgage. Homeowners were given a chance to speak with a loan counselor, and find out if they qualified for a loan modification.

Many were turned away as the bankers had only anticipated 200 homeowners showing. Indy Mac Federal Bank, the Federal Insurance Corp, and the Los Angeles Neighborhood Housing Service sent out letters to 4,000 local residence. Those who were turned away were asked to call the bank at a later time. A second Home Preservation Day is planned for December 2 in Riverside, California.

Fannie Mae and Freddie Mac are placing a hold on all foreclosure through the holidays. The freeze will begin on the 26^th of November, one day before the Thanksgiving Holiday and will continue through January 9^th. This break will allow servicers more time to implement a program for homeowners who need a loan modification, and in the mean time allow homeowners to remain in their homes and have a chance to be a part of the program. It sounds like a move they shouold have made back in September, but I suppose its better late than not at all.

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.