Expecting millions of foreclosures, the Obama administration is developing an alternative program to help troubled homeowners avoid losing their home, beyond a mortgage modification program the White House launched in March, according to a key Treasury official on Thursday.
“We are developing a foreclosure alternatives program for HAMP [Home Affordable Modification Program], which will provide incentives for short sales and deeds-in lieu of foreclosure where borrowers are unable or unwilling to complete the HAMP,” said Herbert Allison, assistant Treasury secretary for Financial Stability at a hearing held by Congressional Oversight Panel chief Elizabeth Warren. Read more about the new homeowner program…
Rather than create a new program, the Obama Administration should do a nationwide cramdown, converting all adjustable rate mortgages into long-term fixed-rate mortgages with low monthly payments. Stop giving the banks wiggle room. The free lunch for banks is over.
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