The Obama administration is expected to announce Tuesday that it is expanding its plan to stem the housing crisis by offering mortgage lenders incentives to lower borrowers' bills on second mortgages.
During the housing boom, lenders readily gave out "piggyback" second loans that allowed consumers to make small down payments or avoid fees entirely. While home prices soared, such mortgages were even extended to borrowers with poor credit scores and people who didn't provide proof of their incomes.
But those loans, which are attached to about half of all troubled mortgages, have proved an obstacle to efforts to alleviate the housing crisis. That's because borrowers who are trying to get their primary mortgage modified at a lower monthly payment need the permission of the company holding the second mortgage.
The new plan aims to get rid of that roadblock, said two senior administration officials, speaking on condition of anonymity because the details were not yet public.
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Tuesday, April 28, 2009
Obama to Expand Housing Plan
Labels: barack obama, obama housing plan, piggyback loans