Washington Asked To Do More To Prevent Foreclosures

From Time magazine:

As of August, nearly 3% of all home loans were in foreclosure, and a further 6% were more than 60 days late on their mortgage payments. To the back burner went Treasury’s original plan to buy up distressed mortgage bonds, and along with it the idea that such purchases could be used to pressure banks into giving better loan deals to homeowners facing foreclosure.
Saving homeowners is far from easy. The original Bush plan, FHASecure, which involved the government refinancing people into lower-interest loans, has thus far helped only about 387,632 borrowers. A subsequent plan to identify borrowers in trouble and modify their loans has been more successful. As of October, the Hope Now Alliance says it has helped 2.3 million borrowers stay in their homes. In July, Congress allocated $300 billion for a new plan, Hope for Homeowners, to help borrowers stay in their houses. The current global credit crisis originates from the moment when subprime borrowers starting having trouble making their mortgage payments, which had been funneled into interest payments to bond holders.
And the fractured ownership of those mortgages vastly complicates efforts to help homeowners. People with knowledge of the mortgage business believe that proposals to buy up individual home loans and refinance them, as proposed by Senator John McCain, seem impractical at best. The $11 trillion mortgage market may be small potatoes compared with the problems in the $60 trillion market for credit default swaps. A number of economists have recently proposed new plans to stop foreclosures, seeking mechanisms to buy up and refinance individual home loans.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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