The Obama administration’s $300 billion Hope for Homeowners program may be retooled to help the growing number of Americans who owe more than their properties are worth as current anti-foreclosure efforts fail to account for these “underwater” borrowers.The changes would be at least the third lease on life for the program, which began in October 2008 during the Bush administration and has so far helped just 96 of the 400,000 homeowners originally targeted.The U.S. Federal Housing Administration is considering ways to make the program more effective, Commissioner David Stevens said in an interview… While he wasn’t specific about any changes, he said Hope for Homeowners could be expanded to more directly help borrowers with negative equity.“The Hope for Homeowners program is unique in that it involves equity writedowns, principal balance reductions to help the underwater borrower,” Stevens said. With home prices down as much as 30 percent from their peak in April 2006, more borrowers are walking away from their homes even if they can afford the payments, administration officials and analysts have said. The Treasury Department is looking for a solution for the more than 10 million underwater homeowners that analysts estimate may willingly let their mortgages slip into default, which would push home prices even lower and hamper the economic recovery.
By Dawn Kopecki and Theo Francis, Jan. 27, 2010 Bloomberg
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