WASHINGTON — Amid rising U.S. foreclosure filings, U.S. government officials Thursday announced plans to broaden their efforts to help troubled homeowners and further ease the housing crisis.
Officials announced two new programs: one aimed at giving mortgage servicers incentives to relocate troubled homeowners to a home they can afford, and another that will provide lenders incentives to modify loans in areas where home price declines have been severe.
The Obama administration in March unveiled key details of its $75 billion housing market rescue plan — known as the Making Home Affordable Program — which works by paying mortgage servicers to reduce borrowers payments. The aim of the ambitious effort, which was recently expanded to help lower the cost of second mortgages as well, is to help as many as 9 million homeowners avoid foreclosure.
Despite the new efforts, U.S. foreclosure filings in April rose to a record, according to a RealtyTrac report released Wednesday.
Under the new program administration officials unveiled Thursday to help provide foreclosure alternatives, Treasury plans to encourage servicers to consider a short sale or deed-in-lieu if a borrowers doesn’t meet the eligibility requirements under the government’s plan to encourage loan modifications.
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