Rumors are swirling today that the Obama administration will soon unveil a new plan designed to help people who owe more on their mortgages than their homes are worth. Here are some bits from the recent AP story on the subject:
The Obama administration will announce Friday a plan to reduce the amount some troubled borrowers owe on their home loans, after months of criticism that it hasn’t done enough to prevent foreclosures.
The plan will let people who owe more on their mortgages than their properties are worth get new loans backed by the Federal Housing Administration, people briefed on the plan said. It would be funded by $14 billion from the administration’s existing $75 billion foreclosure-prevention program. …
The plan also will require the more than 100 mortgage companies participating in the administration’s program to consider slashing the amount borrowers owe. They will get incentive payments if they do so. The plan also is expected to include at least three months of temporary aid for borrowers who have lost their jobs.