US federal housing plan aims at heart of financial crisis | The Daily Star
12:00 AM, February 19, 2009 / LAST MODIFIED: 12:00 AM, February 19, 2009

US federal housing plan aims at heart of financial crisis

A massive US government stabilisation plan for the battered housing market unveiled Wednesday takes aim at the epicenter of the global financial crisis with hundreds of billions of dollars.
The initiative is designed to stem a rising flood of foreclosures and help between seven and nine million homeowners restructure or refinance their mortgages to avoid losing their homes, the Treasury Department said.
"The plan not only helps responsible homeowners on the verge of defaulting, but prevents neighbourhoods and communities from being pulled over the edge too, as defaults and foreclosures contribute to falling home values, failing local businesses, and lost jobs," it said in a statement.
The Homeowner Affordability and Stability Plan was to be formally unveiled by President Barack Obama later Wednesday in Arizona, one of the worst-hit states in the housing crisis.
As part of it, 75 billion dollars would be made available in a homeowner stability initiative to help up to four million homeowners at risk of foreclosure keep their homes.
"This initiative is intended to reach millions of responsible homeowners who are struggling to afford their mortgage payments because of the current recession, yet cannot sell their homes because prices have fallen so significantly," the Treasury said.
The bursting of the US real estate bubble in 2006 led to the subprime mortgage crisis that erupted in August 2007, sparking the global financial crisis that has brought world economic growth to a halt.

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