New Foreclosure Prevention Plan Announced
President Obama is announcing an expansion of foreclosure-prevent tactics, including a plan to reduce principal balances and special aid for unemployed borrowers.
The bulk of the responsibility for carrying out the new program will be assigned to the Federal Housing Administration, which will insure lenders against part of the losses.
The plan asks banks to write down loan balances to less than the value of the home. If there is both a first and second mortgage, the combined total would have to be no more than 115 percent of the home’s value.
The Treasury would pay part of unemployed homeowners’ loans for three months while they job hunt.
Source: The Wall Street Journal, Nick Timiraos and James R. Hagerty (03/25/2010)
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Scammers Target Troubled Borrowers.
Scam artists are proliferating, attempting to make money off troubled borrowers interested in taking advantage of President Barack Obama’s foreclosure-prevention plan.
The firms charge fees for what they tell borrowers will be quick and effective negotiations with banks. In most cases, the firms take the home owners’ money – often more than $1,000 – and do nothing.
The Federal Reserve recently issued this advice for people seeking to modify their mortgages:
* Work only with HUD-approved nonprofit counselors. (See www.hud.gov)
* Don’t agree to pay a fee before you are provided with the promised service.
* Beware of people offering “guaranteed” results.
* Don’t sign blank forms or documents you haven’t read.
Source: The Wall Street Journal, James R. Hagerty (03/11/2009)
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