The Positive Effects of the Mortgage Bailout

Of the trillions of dollars going toward the various federal government bailout programs, only about one-tenth of the funding is earmarked for the mortgage and lending bailout. Plenty of programs have already been instituted to help lenders as well as homeowners, but how are things shaking out so far?

The proof is in the numbers.

Recently, the U.S. Census Department and the Department of Housing and Urban Development (HUD) reported that the home sales in the U.S. are on the rise. In June of 2009, house sales were up by 11% as compared to the May figures. It's also 21.3% over the figures reported in June of 2008.

While foreclosure rates are still very high, it's not as bad as it could be.

The Federal Housing Finance Agency (FHFA) reported fourth quarter 2008 foreclosure rates totaling 149,981 homes. The foreclosure figure had increased to 243,824 by the end of the first quarter of 2009, which indicates a 61% increase in a short three-month period.

This doesn't create a future picture that is very positive, but when you take into consideration that the bailout provided incentives to lenders to institute programs such as loan modifications to prevent foreclosure, these foreclosure numbers could be worse without these programs.

Again, the proof is in the numbers. During the fourth quarter of 2008, approximately 65,000 homes were saved from foreclosure because of programs such as loan modifications. In the first quarter of 2009, homes saved from foreclosure because of these programs increased to 78,000.

And with even more home retention and government programs still being put in place, foreclosure rates may be kept from reaching higher rates--making the bailout even more of a success.