Homeowners struggling to avoid foreclosure are about to get a boost from the Federal Housing Administration. The FHA commissioner is expected to announce plans to expand an aid program that will allow borrowers saddled with negative equity to write down part of their mortgages and refinance their homes with cheaper FHA-insured loans, reports the Wall Street Journal.
The strategy is likely to become the core of a more aggressive White House response to the crisis. The expanded FHA program, initially designed to help 100,000 homeowners, is expected to aid a total of 500,000 by the end of 2008. The move is aimed in part at forestalling more costly efforts by Senate Democrats to address the crisis.