New federal anti-foreclosure effort will help Northeast Ohio

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New federal anti-foreclosure effort will help Northeast Ohio

Cleveland Plain Dealer – WASHINGTON — Homeowners who are unemployed or have mortgages that exceed the value of their homes will be targeted for special aid under a revamped federal program to fight mortgage foreclosures that the U.S. Treasury Department predicts will benefit states like Ohio.

The Treasury Department estimates the program funded by $50 billion in bank bailout money will help 3 million to 4 million homeowners nationwide refinance their mortgages to a more affordable rate by the end of 2012.

Treasury officials say the initiative announced Friday will particularly affect states like Ohio, where employment and property values are diminished. It will let lenders temporarily cut mortgage payments for unemployed homeowners who are looking for work and make it easier for banks to write down principal of underwater loans — those whose balance exceeds the value of the home.

"It directly addresses the problems in Ohio and elsewhere," says Treasury Assistant Secretary Michael S. Barr.

Local mortgage foreclosure experts say the newly announced changes to the troubled Home Affordable Modification Program (HAMP) are a step in the right direction, but they predict limited help for homeowners because lender participation is voluntary.

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