Bernanke Plugs More Help for US Homeowners

Will examine debacle's effect on real-estate market

(AP) - Federal banking regulators are examining whether mortgage companies cut corners on their own procedures when they moved to foreclose on people's homes, Federal Reserve Chairman Ben Bernanke said today. "We are looking intensively at the firms' policies, procedures, and internal controls," Bernanke said. "We take violations of proper procedure very seriously." Preliminary results of the probe are expected next month. More»

(NEWSER) - New York Times economics reporter Edmund Andrews was smart enough to avoid a financial disaster like the mortgage crisis. But “I had two utterly compelling reasons for taking the plunge,” he writes: “The money was there and I was in love.” With a new fiancée—and back-breaking alimony payments to his first wife—he bought a $460,000 home, using a “liar’s loan” mortgage, based on a fib about his salary. More»

Criteria keep many who need help from refinancing under the plan

(NEWSER) - A large swath of Americans will see no help under the Obama administration’s housing rescue plan, the New York Times reports. While designed to prevent 3 million to 4 million foreclosures through loan modifications, the plan doesn't cover those whose loans aren’t backed by Fannie Mae or Freddie Mac, or those who owe more than their home’s value on loans more than $729,750 through other lenders. More»

Proposal does does little to address securitized mortgages

(NEWSER) - The Obama administration’s foreclosure-prevention plan contains more carrots than sticks, relying heavily on incentives designed to prod mortgage servicers to modify at-risk loans, the Wall Street Journal reports. The plan offers monetary rewards to mortgage companies that lower interest rates on delinquent mortgages, and reduces principal for borrowers who stay current on their payments. More»

Citi drops opposition to Senate proposal

(NEWSER) - A Senate plan to help struggling homeowners keep their houses moved closer to fruition yesterday as Citigroup ended its opposition to the bill, the Wall Street Journal reports. The measure would allow so-called “cramdowns,” in which judges in Chapter 13 bankruptcy cases could set lower principal and interest rates, or extend the terms of loans. Citi has changed its stance after receiving $45 billion in government aid in the fall. More»