Monday the Obama administration announced plans to put pressure on mortgage lenders to help homeowners facing foreclosure.

The plan's goal is to increase the rate at which troubled home loans are converted into new loans with lower monthly payments.

President Obama's plan hopes to reduce that number, but both real estate agents and mortgage companies say this isn't a solution---it's merely adding to the problem.

In Greene County it's expected the number of foreclosures will only increase into next year.

"When you look at the numbers from '97 forward, even through 2000 we were doing less than 300.  In 2008, we had 989.  We may come close to that or exceed that for 2009," said Greene County Recorder Linda Montgomery.

But it's no surprise to those who make the joy of home-buying their life's work.

Realtors say for years the qualifications were lax making it easy to buy.

"They made it so easy to qualify.  Any time you can walk in to a lending institution and say to somebody, well I don't have any tax returns I want to show you, but I'll show you what my income is, and then have somebody take their word and say, oh okay," said realtor John Heitz with ReMax.

But when the economy crumbled and interest rates sky-rocketed, so did foreclosures.

While the Obama administration hopes to help those facing foreclosure, mortgage companies say the government is part of the problem.

"The government caused this problem by encouraging or demanding that bakers make these type of loans.  Then, the banks went out to the brokers and said originate these loans," said Brad Farris of Farris Mortgage.

Farris says mortgage lenders are moving as quickly as they can to help homeowners, but they are simply bombarded.

"There's a huge amount of people who qualify for the program, but unfortunately to go through each and every hurdle that the government sets forth takes a huge amount of time," said Farris.

And in turn, everyone is hurting.

Heitz says foreclosures have a lasting affect, even on those who aren't a direct victim.

"Bank-owned homes usually sell for less than what the house would usually sell for if it hadn't been a bank-owned home.  Once that home sells it affects the property value of every other home in the area," said Heitz.

A report last week by the Mortgage Bankers Association found 14-percent of homeowners nationwide were behind on their payments or in foreclosure.

Farris Mortgage says the problem likely won't go away until a new generation graduates and starts buying some of the current home inventory.
 

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