Government Plans Mortgage Assistance Expansion

Washington, DC, March 26, 2010--The Obama administration plans to expand its efforts to help homeowners avoid foreclosure.

Foreclosures are expected to climb to 4.5 million this year from 2.8 million in 2009, according to RealtyTrac Inc.

The plan would expand Treasury Department and Federal Housing Administration programs and use funds from the $700 billion Troubled Asset Relief Program, according to a Bloomberg News story.

According to one investment oficer, the program limits the losses of the most overvalued properties and it also limits the losses to the borrowers that are in the most distress.

The plan would allow more mortgages to be refinanced into FHA guarantee programs if the borrower is current on the loan.

The Treasury would also help unemployed homeowners reduce mortgage payments for at least three months while they look for work.

Critics, including consumer groups and Republican lawmakers, said the administration hasn’t yet done enough.