The US Treasury unveiled details yesterday of Barack Obama’s housing rescue plan, which will pay mortgage servicers to modify troubled home loans while reducing borrowers’ interest rates to as low as 2%. The Obama administration said its housing-rescue plan will help as many as one in nine homeowners, from low-income Americans struggling to avoid foreclosure to well-off borrowers who owe more than their homes are worth.
Those hoping to qualify for a relaxation of mortgage terms will have to document their income fully and sign an affidavit declaring financial hardship.
Servicers, which collect home-loan payments and work with troubled borrowers, will have to conduct detailed assessments of a borrower’s ability to pay and meet strict reporting rules in order to get incentive payments from the Treasury.
Financial Times, Wall Street Journal