The federal government’s Housing Affordability and Stability Plan is beginning to help homeowners in Chandler, a prominent suburb of the Phoenix Metro Area.  Housing and lending professionals are beginning to see adjustments to interest rates and in some cases to the principal as well.  This has led to a record drop in the number of foreclosures in the greater Phoenix area and more than 3,000 foreclosures being canceled.

While President Obama announced the program in mid February lenders were initially confused due to a lack of messaging from the government.  Because of this they were unable to follow guidelines laid out in the plan until a few weeks ago.  In an April 6^th interview with azcentral.com the director of the non-profit Community Housing Resources of Arizona, Joann Hauger, explained the confusion this caused, “Struggling homeowners heard about the plan and were calling their lenders asking if they were eligible, and services were saying no or didn’t know what the homeowner was talking about.  Then last week, lenders started modifying loans.”

With the banking industry clear about the guidelines lenders are beginning to adjust homeowners mortgages to avoid foreclosure.  Under the program a lender can either refinance or modify a mortgage.  While refinancing can only lower the interest rate, a modification has more options, including extending the life of the loan or lowering the principal amount.

This has led to new lows in local foreclosure numbers.  February saw 3,377 foreclosures in March, down from a high of 5,200 in February.  The trend was also reflected in the number of cancelations which jumped from 1,800 in February to 3,100 last month.