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Feds Ponder Rescue Plans as Housing Slump Worsens  

Posted Feb 22, 08 12:05 PM CST in Business    Most Covered

(newser) – With one in 10 US homeowners owing more on their homes than they’re worth, the highest proportion of negative-equity loans since the Depression, the government is weighing plans that would apply the brakes to the rapidly accelerating housing market collapse, the New York Times reports. Possibilities include federal loan guarantees and spending billions refinancing at-risk mortgages.

Bank of America says the credit crunch will lead to “an unprecedented number” of home foreclosures and proposes a massive federal swap of delinquent mortgages for fixed-rate loans. Home prices slipped 6% last year, and experts say they could fall 25% more by 2009, reports Time. The real worry, one economist said, is that “banks will eventually run out of capital.”

Sources New York Times, Time

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Feds Ponder Rescue Plans as Housing Slump Worsens
Graphic will show recent foreclosure and lender statistics; 2c x 5 inches; 96.3 mm x 127 mm   (Associated Press)
Feds Ponder Rescue Plans as Housing Slump Worsens
Graphic shows selected metropolitan areas with highest foreclosure rates; 2c x 3 inches; 96.3 mm x 76.2 mm   (Associated Press)
Feds Ponder Rescue Plans as Housing Slump Worsens
A foreclosure sign tops a sale sign outside an existing home on the market in northwest Denver. Colorado's housing industry continued its slide in record territory in 2007 as foreclosure filings climbed...   (Associated Press)
Feds Ponder Rescue Plans as Housing Slump Worsens
Treasury Secretary Henry Paulson, center, announces a mortgage initiative "Project Lifeline", Tuesday, Feb. 12, 2008, during a news conference at the Treasury Department in Washington. The Bush administration,...   (Associated Press)
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subprime mortgages  • housing crisis  • mortgage crisis  • debt  • negative equity  • mortgage debt  • Federal government


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