Consumer Law

Obama Administration Plan to Help Borrowers Takes Shape

By Jeff Sovern

The Times is reporting here on some aspects of President Obama's plan to help borrowers facing foreclosure.  An excerpt:

President Obama?s plan to reduce the flood of home foreclosures will include a mix of government inducements and new pressure on lenders to reduce monthly payments for borrowers at risk of losing their houses, according to people knowledgeable about the administration?s thinking.

The plan, to be announced Wednesday, is expected to include government subsidies for reducing a borrower?s interest rate, which a lender would have to match with its own money.

But officials cautioned that subsidies for lower interest rates would not in themselves help many troubled homeowners, because lenders were still likely to view many of those borrowers as bad risks and refuse to restructure their loans. As a result, they have been casting about for sticks as well as carrots to persuade the lenders to take part.

Full post as published by CL&P Blog on February 17, 2009 (boomark / email).