Banks Must 'Step Up' To Help Stop Foreclosure

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Housing Secretary Shaun Donovan said Thursday in an interview that it’s critically important that banks and lending institutions “step up to the plate” to help make certain the Obama administration’s new home foreclosure initiative succeeds.

“This started as a mortgage crisis but it’s become a jobs crisis,” said Donovan following the announcement of the $75 billion plan to help prevent foreclosures.

In an interview with the “Today” show on NBC Donovan stated that the administration feels confident that enough requirements are put in place to ensure refinancing by the banks which will “tip the balance for millions of homeowners.”

Sheila Bair of Federal Deposit Insurance Company stated that the while some foreclosures will be unavoidable, the plan should help bring the foreclosure levels to the historical averages.

The plan’s key provision for mortgage modification will only benefit the people with good credit under the new plan, Donovan said in the interview.

“There are clearly a number of homeowners around the country who won’t benefit and shouldn’t benefit”, Donovan said referring to the investor homeowners that never intended to occupy the purchased property.

Reported by Associated Press on February 19th 2009

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