The program – originally announced in 2011 – seeks to connect private equity investors with government foreclosures to convert them into rental properties. Instead of the federal government serving as a virtual landlord to thousands of government homes – such as VA homes, HUD homes, and USDA homes – private investors would purchase them in bulk, rehabilitate the home foreclosures, and then turn them into rentals.

The plan would take advantage of an increased demand for rental properties over the last few years while also serving to relieve the government – and the American taxpayer – of the financial burden of maintaining thousands of non-performing assets. Over 200,000 foreclosure listings would be marketed by the government for the new pilot program, set to begin sometime this year.

Already, private equity investors are lining up around the block. The proposition has turned a decently-sized market worth millions into a huge potential market worth billions – a move that could inject much-needed capital into the housing market and potentially provide a boost to the economy as well.

Throw in the consideration that today’s sky-high rental prices could be reduced by increased demand and savings incurred through cheaper foreclosures and millions of American renters could receive a stimulus boost as well.

Lenders are cautiously optimistic about the proposal, at least as it concerns originating loans that are guaranteed by the federal government. This could lead to more home loan origination as well as a general check on declining home prices throughout the country – particularly in hard-hit areas like Florida, Michigan, California, New York, New Jersey, Georgia,Illinois. Already home prices have plummeted by 3.7% from November 2010 to November 2011, with the trend set to continue throughout the next year.

The federal government is currently working on initial partnerships and transactions with private-equity investors and firms that will be completed in the first quarter. Additional partnerships will be announced throughout the year, possibly with rent-to-own clauses included for many tenants. Time will tell if the program will be a success, but it is fair to say that the Obama administration needs a big-time victory with this initiative to both help repair the housing market and bolster its chances with elections in November.

HAMP, originally created in 2009, was designed to help American homeowners avoid foreclosure by working with lenders to modify their mortgages. The theory behind the program was that homeowners could keep their properties – and stop foreclosure from creating more destructive home foreclosures in already-depressed markets – with lower, more-affordable monthly mortgage payments and principal reductions.

But, the $29 billion program has not been without its critics, who allege the program has been too limited, too underfunded, and too ineffective in preventing foreclosure properties from flooding the market.

Largely because of these criticisms, the Obama administration is seeking to fix these and other problems by offering additional financial incentives to lenders for principal reductions. This means thousands of American homeowners could see their monthly payments drop by having lower principal balances. Such a move could have a stimulating effect on the economy, especially since the administration will also offer financial incentives to Fannie Mae and Freddie Mac for modifications. Since the two programs account for the vast majority of mortgages currently owned, the impact could be significant.

Whatever the future impact, the past performance of HAMP has been less than desired. Out of roughly 1.7 million program applicants, only about 900,000 have had their mortgages permanently modified – and a significant percentage of those have fallen through since.

Some of this failure has been blamed on the nation’s largest lenders, including JPMorgan Chase, Wells Fargo, and Bank of America. Others point the finger at the mass of red tape and bureaucracy that has plagued the program’s administration.

Whatever the cause of the problem may be, the nation’s foreclosure rate – hovering around 3.51% as of October 2011 – is still far too high for a healthy housing market. Serious gains have yet to be made in removing foreclosure listings and having homeowners fill vacancies, primarily due to reluctance by big banks to lend to most prospective homebuyers. Loosening a still-tight credit market is one priority, as is an Obama initiative to sell blocks of distressed properties to private investors for rehabilitation and transformation into rental units.

At any rate, the besieged program has another year to perform before Washington becomes serious about pulling the plug.

Florida has long since been near the top of the list when it comes to home foreclosures. The state’s current foreclosure rate remains sky high, with one out of every 360 housing units in the state in some part of the foreclosure process. South Florida has been particularly hit hard by the foreclosure crisis; it’s foreclosure rate of over 18% is six times higher than the national rate of 3.51%. Since the area contains a significant portion of the state’s population – and registered voters – the housing market is at the top of the list of issues in the state.

Unfortunately for Florida homeowners, none of the four main candidates – Mitt Romney, Newt Gingrich, Rick Santorum, and Ron Paul – has offered any significant plans on fixing the broken housing market and restoring a sense of normalcy to a domestic market that is marked by high numbers of foreclosure properties and falling home values.

Part of the silence from the Republican nominees is due to their ideological backgrounds, which call for less government interference in the market. Romney, extolling this approach, has stated repeatedly that the best solution is to indirectly impact the housing market by creating jobs through tax cuts and other alleged solutions for unemployment and other economic woes.

Gingrich has largely echoed these sentiments, stating that government interference in the housing market helped to lead to the current mess that has resulted in millions of foreclosures over the past few years and left millions more owing more on their homes than what they are worth. Gingrich has come under fire lately for his ties as a lobbyist with Freddie Mac, one of the key agencies accused by Republican critics of playing a major role in the crisis.

Paul is even more anti-government when it comes to housing solutions. Santorum, for his part, did recommend a refinancing plan, and he and Romney have advocated looser restrictions for loan modifications.

Still, the most prominent Republican solution for the foreclosure crisis seems to be to let the market “run its course and hit the bottom” (according to Romney). For Florida residents, that may not be an acceptable course of action.

The question now becomes this: If/when this settlement passes, will homeowners receive any significant benefit?

On the surface, the question is a bit silly. One would expect homeowners to receive some kind of restitution for being wrongfully foreclosed on by banks like Bank of America, Citibank, Wells Fargo, JPMorgan Chase, and Ally Financial. Previous versions of the settlement, though, did little to assuage the doubts of consumer advocates – including several high-powered attorneys general involved in the negotiations.

The latest incarnation of the settlement does provide for some monetary compensation for homeowners who suffered as a result of the banks’ alleged practices, but former owners of home foreclosures will not get their homes back.

Of the $25 billion, approximately 68% of the amount – $17 billion – will be allocated toward principal reduction to help owners of distressed properties and underwater homes. Roughly 20% of the amount – $5 billion – will be targeted toward state and federal programs that include a provision to give roughly 750,000 Americans checks worth $1,800 apiece. The remaining amount – $3 billion, or 12% – will go toward assisting homeowners with refinancing their mortgage loans at a lower interest rate around 5.25% – higher than today’s incredibly low rates but lower than most of the interest rates for today’s outstanding loans.

There could also be measures of reform contained in the bill, but one of the most contentious measures – civil immunity for banks – is still very much on the table and a real possibility. Limited criminal immunity may also be included, but banks will be vulnerable to some legal action by the states. Already several states have promised to initiate investigations into faulty foreclosure processes, including Delaware, New York, and Massachusetts.

In the end, if the settlement passes, nearly a million Americans could see a $20,000 reduction in their principal balances on their loans. That will help some homeowners, but large swathes of underwater and distressed homeowners will not receive any benefit from the settlement.

Since this is an election year, the Obama administration will likely pressure all sides to make this latest itineration of the settlement the final one. Even if states decide to not sign the agreement, it will likely pass – still leaving the door open for major legal battles down the road.

The data – compiled by Lender Processing Services – suggest that overall mortgage delinquencies fell by a substantial 7.7% from December 2010 to December 2011. This would indicate a current mortgage delinquency rate of roughly 8.15%, trending downwards.

Foreclosure rates fell by a lesser margin – 1% – but in this environment, any drop is good news. The current rate is hovering around 4.11% across the country.

The downside to the data released resides in some ominous numbers that suggest we are not out of the woods yet. Approximately 1,792,000 homes are at least 90 days delinquent, which is usually when they turn into home foreclosures. The only reason why many of these seriously-delinquent homes have not already become foreclosure properties is due to the backlogged foreclosure process that still remains mostly clogged in many areas of the country. (The top states with the most foreclosures and delinquencies as of December 2011? Florida, Mississippi, Nevada, New Jersey, and Illinois.)

Still, analysts are open to the prospect that 2012 – once thought to be the beginning of a new flood of foreclosure listings that were delayed by foreclosure fraud and robo-signing scandals – could actually be better than expected for the real estate industry. More homes are being sold, builders are optimistic about new customer prospects, and low mortgage rates are enticing more investors and homebuyers to enter the real estate market.

Going forward, the market will need to continue the current trend of falling foreclosure rates and increasing existing home sales. A major reworking of the Home Affordable Refinance Program, called HARP 2.0 by some, will more than likely debut at the end of the first quarter and could eventually lead to hundreds of thousands of Americans avoiding delinquency and saving money through lower monthly payments.

Until then, analysts are continuing to wait to see if consumer demand is able to step up and pick up home sales activity that is still well below desired levels. If these data are any indication, though, that demand may be here sooner than later.

Now, well over a year later, and after several false alarms of a settlement between a coalition of state attorneys-general and the five major lenders at the heart of the case (JPMorgan Chase, Wells Fargo, Bank of America, Citibank, and Ally Financial), a deal may be within striking distance according to Washington insiders.

Naturally, those in the real estate industry who have been following the foreclosure fraud case for the past year are skeptical; after all, the deal was supposedly close to completion on many prior occasions before the coalition of AGs virtually splintered in 2011 over several unpopular components of the deal – including the notion that the deal did not go far enough in punishing the banks for their illicit processes and ensuring that they would not conduct themselves the same way with future home foreclosures.

Since 2012 is an election year, the Obama administration – the impetus behind the meeting of the minds going on in D.C. – is under more pressure than ever to arrange some kind of workable solution. This version of the deal apparently incorporates principal reduction for close to one million borrowers across the country, a move that is much desired by housing advocates and one that could serve as a mini-stimulus – paid for by the banks rather than the taxpayers.

The rest of the details – a $25 billion settlement split amongst the banks – still leaves some housing advocates critical. To them, including California AG Kamala Harris and NY AG Eric Schneiderman, the deal doesn’t do much to create a viable framework to protect against future abuses in the system. Even a principal reduction for some borrowers would not be a punitive measure to the banks, and those who could not stop foreclosure wouldn’t get anything for their troubles.

With that being said, some kind of arrangement will be made between the states and the banks, even if the Obama administration has to engage in heavy arms-twisting behind the scenes with California and New York. Too many foreclosure properties are in the market, driving down prices, for the administration to take anything less than an aggressive stance with their solutions to the housing crisis.

As the first quarter of the new year gets into full gear, the real estate market finds itself trying to still solve the foreclosure crisis and recover from nearly five years of falling prices, rising inventory, and lackluster demand.

Will the new year be any different? What changes and trends will we notice in 2012 – and which, in particular, can be observed over the next few months?

The Bottom May Be Near

It would be premature to say that we have reached the bottom of the housing market as far as housing prices are concerned. We expect prices to continue to fall or at least remain stagnant in most of the country, with pockets of positive growth here and there.

Still, the much-awaited bottom of the market may be near. It won’t happen in the first quarter, but aggressive investors should think about this: we could look back later and see that the first quarter of 2012 was the perfect time to buy.

Refinancing Goes High; Rates Stay Low

Historically-low interest rates will remain another hot trend throughout the first quarter, as the Federal Reserve has shown no signs of allowing rates to rise. Rates will continue to remain low, which will in turn encourage more people to refinance – especially once the new provisions of the old Home Affordable Refinance Program take full effect in a month or two.

The upsurge in demand for the revised program could help thousands of underwater homeowners, which in turn could lower the foreclosure rate for the second and third quarters and cause housing prices to gain traction later on in the year – this time in the right direction.

More Competition for Investors

Yet another trend that is heating up quite nicely for investors is competition – and the effects aren’t entirely bad. More competition from an increased number of investors – particularly foreign entrepreneurs flush with cash – means that lenders are more apt to sell foreclosures and short sales on a faster timeline. This in turn means you could capitalize on these distressed properties much more quickly than you could last year.

Those who have been learning their way around the short-sale market could be the dark-horse winners of the market for 2012 if they pay close attention, but virtually anything in the foreclosure market is gold waiting to be discovered.

Those in the real estate market today looking to buy a home should use the best tools out there to make a smart purchase. After all, in today’s market, wise choices are at a premium – and tools like online mortgage calculators can help prospective homebuyers make the right decision.

Here is a brief guide to the benefits of using an online mortgage calculator to help you determine the finances behind purchasing the next home of your dreams.

How an Online Mortgage Calculator is Used

As with any tool, an online mortgage calculator is only as useful as what you use it for – and that is especially true with making a big decision like taking out a mortgage.

Planning for the Future

The main purpose of an online mortgage calculator is to help plan for the future. Heading into financial decisions – especially buying a home – without doing the necessary planning to plot a smooth course of sailing is ill-advised. A mortgage calculator allows you to project 5-30 years into the future and see what the costs will ultimately be for your new home.

Calculating for any Scenario

An online mortgage calculator also helps you calculate for any scenario. How much will it cost if your interest rate is 4.25% versus 4.5%? What if you decide to go with an adjustable-rate mortgage instead of a 30-year fixed-rate loan? What about a down-payment? All the variables are easily calculated and are at your fingertips for any scenario.

Deciding to Rent Versus Buy

One of the most important decisions facing prospective homeowners today is the decision to buy a home rather than rent one. It can be a tough decision, especially given the real estate market as it stands today.

Many people use online mortgage calculators to determine if the price of a mortgage is worth the venture – or if it is more expensive to buy rather than rent. In today’s environment, you might very well find that availability of discounted homes – particularly foreclosures – and low prices makes buying more attractive; if so, you can use an online calculator to make that decision.

The Benefits of Using an Online Mortgage Calculator

An online mortgage calculator delivers plenty of benefits to those who want a capable and versatile tool to assist in a crucial decision-making process.

One key benefit is the ability to use numbers that fit your situation, not those of other people. Everyone’s circumstances are different. Some people can put down a large down payment; others can’t. Some will be able to have access to super-low rates of below 4%; some will have to use higher interest rates, or will desire longer payment terms. Whatever your case may be, your circumstances can be accurately reflected in the tool.

Additionally, you can prepare several different scenarios and analyze them to find the right scenario for you. It gives you the ability, at a glance, to take in several paths to home ownership and find the most affordable or the most sustainable one. Maybe a fixed-rate, 15-year mortgage with 20% down at 4.25% is the best course of action for you. Unless you see all the numbers, though, you’ll never know.

Furthermore, an online mortgage calculator can give you something to take to the lender to demonstrate your ability to afford a particular mortgage. This not only saves you time but also allows you to support your argument if the lender disagrees and shows reluctance with the loan, as many are wont to do at this point in time.

An online mortgage calculator is a terrific tool that any prospective homebuyer should use before he or she makes a move in the market.

We all know that the foreclosure inventory is incredibly high, which is great for those looking to purchase foreclosed homes for sale. We also know that foreclosure listing services provide the most up-to-date information on recent foreclosures throughout the country. Furthermore, everyone understands that the foreclosure process is still an issue, especially in judicial foreclosure states.

But where, exactly, do we currently stand when it comes to foreclosures?

According to Lender Processing Services, 631 days is the average delinquency timeline for homes that are currently in foreclosure, which is record high.

Obviously, judicial foreclosures are great at ensuring that homes are not foreclosed upon unless the homeowner is truly delinquent. Many non-judicial foreclosure states have had issues with banks wrongfully foreclosing upon homes of innocent homeowners. However, the great thing about judicial foreclosure states is these situations are often avoided.

On the other hand, judicial foreclosure states take much longer to process foreclosures than non-judicial foreclosure states. Although this delayed foreclosure process can provide struggling homeowners with a little more time to stop foreclosure, prolonging foreclosure also prolongs the true effects.

States with judicial foreclosures have twice as high of foreclosure inventories than states with non-judicial foreclosure processes. Furthermore, the foreclosure home sale rate is also significantly lower in judicial foreclosure states in comparison to non-judicial foreclosure states.

At the end of the day, judicial foreclosure states may be protecting their residents from wrongful foreclosure and providing an extended amount of time for homeowners to find real estate resources to help them stop foreclosure, but these states are merely delaying the true impact of foreclosures on the states. In essence, judicial foreclosure states may be up to one year behind non-judicial foreclosure states in terms of progress toward recovery.

However, it is not all bad news.

Since banks had to deal with the foreclosure crisis that has resulted in a loss of a ton of money and high foreclosure inventories, lending standards have become tighter (possibly too tight). Although there are arguments that these standards are unnecessarily high, the loans that have occurred over the last year or so are performing rather well.

Although the delinquency length is increasing due to judicial foreclosure states (and these states have yet to experience the true effects of the foreclosure crisis), there is light at the end of the tunnel. Fortunately, the high lending standards are actually putting performing loans on the market with a low chance of foreclosure, which is great for the real estate market. However, the judicial foreclosure states still have a very long way to go to catch up with non-judicial foreclosure states in regards to progress toward real estate market recovery.

“Foreclosure mediation” has been a buzz-phrase for the past few years as distressed property owners, desperate to stop foreclosure, seek to save their homes in any way possible. As a result, foreclosure mediation – the process by which the home owner and the lender sit down at the same table, most often with a third-party mediator, to work out some agreement to keep the home owner in the home – has become very popular.

After four years of the foreclosure crisis, though, some are criticizing the practice and claiming it promises much but delivers on little in the way of keeping home foreclosures off of the auction block. In theory, the practice sounds terrific; if the homeowner and the lender can reach a deal, such as a principal write-down, loan extension, balance forgiveness, or interest rate reduction, then it sounds likely that a foreclosure can be prevented.

Indeed, this has actually happened quite a bit. In Connecticut, for example, approximately 79% of participants who engaged in its foreclosure mediation program either avoided foreclosure or received a loan modification. Nevada has reported an 89% success rate; the city of Philadelphia claims an 84% rate.

Of course, there are problems with the theory and the practice. One of the main issues is the voluntary nature of many programs. In several states, the practice is optional; in these states, the success rate is far lower than in the states listed above. Homeowners may want their lenders to participate, but unless the lender chooses to join in, there is little the homeowner can do to change its mind.

Furthermore, there have been many complaints from homeowners that lenders, even if they participate, do so reluctantly and only do what is expected of them legally in order to complete the process. This results in fewer successful modifications.

Still, support is there for foreclosure mediation, and statistics lend credence to the notion that foreclosure mediation is recommended to avoid foreclosure houses entering the market as frequently as they have been over the past three years. The federal government still believes foreclosure mediation is a key component of any housing recovery, and for the time being at least remains committed to its plans to support mediation programs across the nation.

Ultimately, the result of any mediation may not be seen until the summer or fall of 2012. Until statistics reveal anything significant one way or the other, foreclosure properties will continue – even if some of them will be saved at the mediator’s table.