Six states are trying to reduce the number of home-mortgage foreclosures by setting up funds that help home owners with sub-prime mortgages refinance into more affordable ones.
Maryland, Massachusetts, New Jersey, New York, Ohio, and Pennsylvania are investing $500 million in programs that are either supported by bonds or are offered in conjunction with Fannie Mae (FNMA) and Freddie Mac (FDMC).
About 2.3 percent of the nation's 44 million home loans are expected to move into foreclosure this year. Freddie Mac says 60 percent of these home loans are sub-prime. The projected foreclosure rate is higher than during the oil bust of 1987, but not as high as in the 2002 recession.
The success of these programs hinges on the cooperation of mortgage lenders. I doubt the states taking over the role of mortgage lender. However, nobody wins in a foreclosure, and it's doubtful mortgage lenders are going to agree to both take a hit and lose a consumer.
If you live in New Jersey and are facing foreclosure, you owe it to your self to explore options BEFORE it's too late. Go to http://neforeclosures.blogspot.com/.
East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB