A significant proportion of U.S. housing is inverted. This means that the owners owed less than the value of its domestic market. This may be seen as a negative thing, because the owners will be in the house for sale, in addition to their family, and from the house sale proceeds will be insufficient to cover the loans, so the owners are still obliged to pay the balance of the loss event.

As the next reversal of the results of the status of the loan, there is no power, the owner must continue to provide services for loans? We can say that the fear of losing their homes may be prompted to 1, to continue making payments, but also, if a person’s intention is to live in the house for the long-distance, then the present value of the house with little or no attention to the homeowners. Therefore, not the other way down is not liable for any thing in the overall program impact.

In order to provide some form of assistance to troubled homeowners who have also down to their homes, the Obama administration intended to use the loans to modify the strategy, I do not think to provide a long-term solution is rarely used. The strategy provided only a temporary solution to the problem. Mortgage modification refers to the following conditions: that the lender changed the loan terms of homeowners, lower payments.

The reason why the loan modification provides a temporary solution, because most of the changes lasted only 5 years. Since then, the lender is to restore to the original loan terms of freedom. What will happen then? Similarly, a chain reaction, recent events may be repeated again, another financial crisis may be caused as a chain reaction of all.

In addition to being a long-term assurance does not protect short-term solution, a mortgage modification may not be the best choice because, according to China Banking Regulatory Commission, almost 53 in the first quarter of 2008 amended the percent of the total non-performing loans again within six months. 53% is very high per cent of the neglected or ignored.

Therefore, the use of loans have been revising the policy has some negative impact, it is indeed the Bush administration’s ability to solve key issues say. Do not know from past mistakes is inexcusable to say the least, if the Government has implemented the same strategy, regardless of the fact that the loan modifications are not valid, it serves to illustrate that history always repeat method.

In addition, the loan modification programs may not work correctly because the program does not solve the problem, effectively oriented. Although the payments each month will be possible to reduce the fact that the program is not enough to reduce the loan principle. Monthly payments will be reduced through the cut in interest rates and duration. However, this principle will not be reduced, according to the plan. Since this is the case, how the loan value and market value of the gap closing? How to coordinate the different values, the key is to reduce the principle to meet the current value of the house.

A mortgage modification is a key component of the project selection process. I admit the fact that the selection mechanism is very important, as long as it is effective and reliable, if not, then the subsidies will be offset by the costs and procedures will be rendered useless. It is important to establish proof of financial hardship, such as the eligibility criteria.

This initiative required the owner to provide documents to show the loss of income and so on, but because of the federal government, often times is slow and bureaucratic reputation, subject to a mortgage modification would be a dream, a mirage in many immediate assistance. Struggling homeowners will need to have patience and positive thinking skills. Otherwise, they will struggle in despair because the mortgage modification process is too time-consuming and bureaucratic.

From a personal point of view, the Government should formulate a long-term solution of the housing industry, rather than short-term solution, only a temporary problem, the work more seriously. A well thought out plan is vital to the country’s future prosperity. It is important to as much as possible by any means necessary to resolve current problems, and it is equally important is to keep eyes on the future. Therefore, the drawing board need to come up with one.