The Obama administration is expected to unveil a foreclosure-prevention initiative on Feb. 18 that includes carrots and sticks to encourage lenders to lower monthly payments for struggling borrowers, perhaps by several hundred dollars. For example, Obama is likely to offer government subsidies for reducing a borrower’s interest rate; but he also could push for legislation that would allow bankruptcy judges to restructure mortgages. The string of voluntary loan modification programs administered to date have failed to have much of an impact on the continuing flood of foreclosures. The number of loans in foreclosure set a new record of 2.3 million in 2008, with industry watchers projecting that the rate will rise to at least 3 million this year in the absence of a government bailout.
From “Obama Plan on Housing Said to Push on Lenders”
New York Times (02/17/09) P. B1; Andrews, Edmund L.
