Tuesday, July 14, 2009

U.S. Mulling Mortgage Aid for Unemployed

As the unemployment problem in the country continues, the Obama administration is looking to help the poor U.S. housing market by offering specific aid for taxpayers struggling to make their mortgage payments. According to a new article from Reuters, the President has prompted policy makers to consider new options “allowing borrowers to delay, defer or skip payments," which are more effective than those currently available in the private sector.

The number of failing home loans has been climbing for three years as risky borrowers have defaulted on their easy-to-get loans, property values have sunk and the unemployment rate has climbed.

But the official said the idea, which is still evolving, was difficult from a policy perspective and carries potential hazards. It could help more people struggling with economic difficulty, but it also could create perverse incentives that distort the housing market, said the official, who did not want to speak on the record about internal administration debates.

The official said such a program would be in keeping with other measures to help workers who have lost jobs in the current recession.

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