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There has been some talk this week of some early brainstorming the administration has been doing to see if there is any way to help unemployed people avoid foreclosure. It sounds like they have not figured out any good way to do that yet but the fact that they are mulling the concept over is worth noting. Here is a Reuters article on the subject and some excerpts from the piece:

The official told Reuters it was reasonable for policymakers to consider options for loan forbearance — allowing borrowers to delay, defer or skip payments — that are more effective than those currently available in the private sector.

The number of failing home loans has been climbing for three years as risky borrowers have defaulted on their easy-to-get loans, property values have sunk and the unemployment rate has climbed.

But the official said the idea, which is still evolving, was difficult from a policy perspective and carries potential hazards. It could help more people struggling with economic difficulty, but it also could create perverse incentives that distort the housing market, said the official, who did not want to speak on the record about internal administration debates.

Comments (0) Posted by G.R.A. Admin on Tuesday, July 14th, 2009


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