New Obama Plan to Save Homeowners from Foreclosure

The new plan includes controversial ideas like moving underwater homeowners to government-backed FHA loans and giving grace periods to unemployed owners.
March 27, 2010, 9am PDT | Tim Halbur
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Nick Timiraos and James R. Hagerty write that "The administration, under pressure from community activists, lawmakers and some mortgage investors, is trying to walk a fine line with these changes. Officials want to respond to criticism that HAMP [ the Home Affordable Modification Program] hasn't done enough to prevent foreclosures. But they also are heeding warnings from big banks that a full-fledged embrace of the idea of reducing principal might prompt many borrowers who can still afford their mortgage payments to default in the hope of being rewarded with a smaller loan."

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Published on Friday, March 26, 2010 in The Wall St. Journal
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