 For sale signs are posted on a foreclosed house in Glendale. The Obama Administration announced Friday an expansion of its foreclosure relief program. (Kevork Djansezian/ Getty Images) |
Struggling homeowners are set to get more help from the federal government as the Obama Administration extends its key foreclosure prevention plan for a year.
The administration will also add the number of people eligible for the program to include investors and will increase incentives for large banks to modify more troubled mortgages.
Originally set to expire in December 2012, the administration’s Home Affordable Modification Program will be extended for another year, government officials said Friday. The expansion is part of a renewed push by the Obama Administration to right the housing market as it enters its fifth year of malaise.
“We are still coming back from the worst financial recession since the Great Depression, in which the abuses in the housing sector were the most prominent and have left the deepest legacy,” National Economic Council Director Gene Sperling told reporters in a conference call. “It requires an all-out, all-of-the-above strategy.”
Officials would not say how many new borrowers the administration hoped to reach through the program expansion. The initiative was unveiled in 2009, with the goal of helping as many as 4 million borrowers receive modifications; it has helped only about 900,000 receive new mortgages to date.
The administration said it would expand the program by including a secondary evaluation for borrowers who might have hefty second mortgages or medical bills weighing down finances. It would also expand the program to include so-called income properties, where the people living in the homes are paying rent.
The plan would also triple the incentives for mortgage servicers participating in the program to do principal write-downs. It will also extend those incentives to loans owned or insured by mortgage giants Fannie Mae and Freddie Mac, which have been reticent to reduce mortgage principal given that they have received enormous bailouts from the American taxpayer.
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The administration will also add the number of people eligible for the program to include investors and will increase incentives for large banks to modify more troubled mortgages.
Originally set to expire in December 2012, the administration’s Home Affordable Modification Program will be extended for another year, government officials said Friday. The expansion is part of a renewed push by the Obama Administration to right the housing market as it enters its fifth year of malaise.
“We are still coming back from the worst financial recession since the Great Depression, in which the abuses in the housing sector were the most prominent and have left the deepest legacy,” National Economic Council Director Gene Sperling told reporters in a conference call. “It requires an all-out, all-of-the-above strategy.”
Officials would not say how many new borrowers the administration hoped to reach through the program expansion. The initiative was unveiled in 2009, with the goal of helping as many as 4 million borrowers receive modifications; it has helped only about 900,000 receive new mortgages to date.
The administration said it would expand the program by including a secondary evaluation for borrowers who might have hefty second mortgages or medical bills weighing down finances. It would also expand the program to include so-called income properties, where the people living in the homes are paying rent.
The plan would also triple the incentives for mortgage servicers participating in the program to do principal write-downs. It will also extend those incentives to loans owned or insured by mortgage giants Fannie Mae and Freddie Mac, which have been reticent to reduce mortgage principal given that they have received enormous bailouts from the American taxpayer.
RELATED:
Eric Schneiderman promises aggressive financial fraud probe
California describes $25-billion mortgage settlement as 'inadequate'
States are said to be considering a $25-billion settlement with big banks
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