Asked by Mr.P, Arizona • Fri Aug 31, 2007
The Bush administration today rolled out a plan officials said was geared at helping up to 700,000 homeowners avoid foreclosure in the next two years, but which is not intended as a bailout of mortgage lenders who are facing mounting losses on bad loans.
The plan gives the Federal Housing Administration the authority to insure loans for delinquent borrowers facing foreclosure. Administration officials said the new "FHASecure" program will allow FHA to guarantee an additional 60,000 refinance loans a year.
Because borrowers pay premiums on FHA mortgage insurance, the program is expected to pay for itself and can be implemented immediately as an administrative action.
"We will enact it today, but it will probably be Tuesday (before the program goes into effect) given the long weekend," a senior Housing and Urban Development official speaking on background told reporters in a conference call today.
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