Event though the Boise real estate market has posted many successive months of record setting foreclosure numbers, there is a new number that is at record highs as well, and it has a much more positive tone to it. Permanent loan modifications have started to bail out many homeowners in the area and have the pace that these modifications are being completed at will help lift the market.
Many Boise real estate sellers have simply stopped paying on their mortgages simply because they owe more than the home is worth, and now they are facing a possible change in employment, so a loan modification will help those people out. With more and more desperate homeowners turning to loan modifications, the rate at which these modifications are being approved has dramatically increased to around 15% at present.
The program started when the federal government launched the Home Affordable Modification Program last year, with an initial seed deposit of $ 75 billion. It is designed to help homeowners who are more than 60 days behind on their home payments. With between three and four million home loans being the goal for modification before 2012, the program will have a huge impact on the foreclosure rate. With so many homes upside down in their loan to value ratios after the huge amounts of depreciation we have seen, Boise real estate owners will now be equipped to save their homes.
The banks initially reacted very slow at modifying loans because they had some skepticism about the program and the effect it would have on the foreclosure rates. The major difference in the rate of conversion of these modifications from temporary to permanent has been the Obama administrations continually emphasis on the program as an alternative.
Far too many Boise real estate sellers were hesitant to seek the temporary assistance a short term loan modification granted, so now that the loan modifications are being commuted to permanent loan modifications they are being sought with more fervor.
The possibility for the average troubled Boise real estate owner to keep this home is much higher than previously indicated, with principle reductions to lower payments. The average homeowner stands to save a median savings amount for around 36% on their monthly home loan payment. For a monthly median savings amount of $ 500 many homeowners will work hard for the modifications. Being able to boost the real estate market by slowing the foreclosure rate will ensure that future programs of this kind are more readily available.