Foreclosure-prevention plan laid out
The Obama administration yesterday offered pages of nitty-gritty details for its promised $75 billion attack on the nation’s foreclosure epidemic, aimed at saving as many as nine million homeowners from foreclosure.
The debut of the two-pronged Making Home Affordable Program, focused on mortgage modification and refinancing, will likely be delayed for several weeks, though, as lenders prepare for the anticipated onslaught of borrowers’ looking for help.
The program, first announced Feb. 18, is designed to help up to five million borrowers refinance to lower rates by June 2010 if their mortgages are owned by Fannie Mae and Freddie Mac.
It also provides incentive payments to lenders, to encourage them to modify by Dec. 31, 2012, existing mortgages for about four million Americans who will face foreclosure if nothing is done, as well as rewards to borrowers who pay on time for five years after modification.
Obama’s plan is an ambitious one that “goes much further than previous proposals to stabilize housing,” said Patrick Newport, housing economist at IHS Global Insight Inc., of Lexington, Mass. “It will help reduce the number of ‘preventable foreclosures.’ Whether it will stop the [home-price] bloodletting, however, time will tell.”
[Article originally posted on The Philadelphia Inquirer] Continue reading