Paulson: finding troubled borrowers early key to stalling foreclosures UPDATE

Paulson: finding troubled borrowers early key to stalling foreclosures UPDATE

	Published : Fri, 14 Sep 2007 17:17 By : Agencies Print this Story

(adds Treasury award details)

CHICAGO (Thomson Financial) - Treasury Secretary Henry Paulson said finding borrowers who may have trouble paying their mortgages as early as possible is key to ensuring that US homeowners can stay in their homes.

'The key ... is to identify as early as possible those homeowners that may be facing problems,' Paulson said in Chicago today. 'If you can't identify them, if they don't work with those who can help them, it's going to be very difficult to have success.'

Paulson reiterated that the Bush administration is pursuing several initiatives in order to help borrowers can stay in their homes as many of their mortgage interest rates are reset at higher levels.

He said the administration has been meeting with loan servicers, counsellors, and entities that are developing new, affordable loan products, like Fannie Mae and Freddie Mac. The administration has asked lenders to help identify to offer 'workout' packages aimed at making it easier to borrowers to pay down mortgages even after rates rise.

Paulson said the administration continues to press have ry hard' for legislation modernizing the Federal Housing Administration, and said he hopes Congress can approve a bill that would allow FHA to offer new lending products to consumers.

He also said the administration wants temporary tax relief for homeowners facing tax liabilities due to the cancellation of debt on their primary mortgages.

Paulson and other Treasury Department officials said today that the award of millions of dollars in Treasury funding to various community development groups should help many US homeowners keep up with their mortgage payments.

Paulson and Treasury's Community Development Financial Institutions (CDFI) Fund Director Kimberly Reed were in Chicago today to announce the distribution of 27 mln usd in awards to 68 groups in 30 US states and the District of Columbia.

'The President asked Treasury to focus on helping struggling homeowners keep their primary residence, and we will rely on the help of CDFI organizations like Neighborhood Housing Services (NHS) of Chicago to reach borrowers who are likely to have trouble, and work with them to help them keep their homes,' Paulson said at NHS today.

'Many of the organizations we are awarding today are on the front lines of creating real solutions for those facing foreclosure in our nation's rural and urban low-income communities,' Reed added. Reed said the groups would use the funds to provide more affordable mortgage products and counselling to homeowners.

NHS has a homeownership preservation program that has saved 1,300 Chicago homeowners from foreclosure, Treasury said. The CDFI fund was established in 1994 and is run by the Treasury Department.

pete.kasperowicz@thomson.com

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