Emergency Loans – Foreclosure Relief
Sheila Bair, a federal bank regulator, is lobbying for the government to give emergency foreclosure assistance in the form of emergency loans to approximately one million borrowers. As we all know, many borrowers are in very precarious positions after purchasing homes that would have been slightly out of their reach during the up market, and are now feeling the crunch during our current psuedo-depression.
Under this plan, the Treasury Department will sell $50 billion in debt in order to collect funds. The plan would allow borrowers to pay off as much as 20% of their principal, as well as allowing them to restructure the remaining part of the mortgage into a 30-year repayment plan with a fixed interest rate based on the national average interest rates.
Bair was appointed by the Bush administration, but acts independently. Her plan will need the approval of Congress to be put into effect. It is a plan that will hopefully appeal to both parties, in an attempt to avert a major recession in these troubled times.
