Incentive Program to Ward Off 4 Million Foreclosures

The Obama Administration has outlined plans to assist nearly 4 million homeowners in danger of foreclosure. The total cost to taxpayers runs close to $75 billion.
March 6, 2009, 5am PST | Nate Berg
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"People with mortgages as high as $729,750 could qualify for help, and there is no ceiling on how high their income can be as long as they are in danger of losing their homes. Interest rates on loans could go as low as 2 percent for some. Many homeowners could see their mortgage payments drop by several hundred dollars a month, and some could save more than $1,000 a month."

"Administration officials estimate that the plan will help as many as four million people avoid foreclosure, at a cost to taxpayers of about $75 billion. In addition, the Treasury Department said it intended to follow up with a plan to help troubled borrowers with second mortgages, which many homebuyers used as "piggyback" loans to buy houses with no money down."

"The plan is bolder and more expensive than any of the Bush administration's programs, which were based almost entirely on coaxing lenders to voluntarily modify loans. While the number of loan modifications has climbed sharply, the number of foreclosures skyrocketed to 2.2 million at the end of 2008, a record."

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Published on Wednesday, March 4, 2009 in The New York Times
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