The National Association of Home Builders (NAHB) expressed strong support for a plan put forth by Federal Deposit Insurance Corporation (FDIC) Chairman Sheila Bair to reduce foreclosures, noting that it would help to keep people in their homes and avoid further surges in the inventory of unsold homes.
"The FDIC plan to use TARP funds to bolster foreclosure relief efforts is a creative approach to help strapped borrowers on the verge of losing their homes," said NAHB president and CEO Jerry Howard. "Effective foreclosure relief, along with a stimulus program that includes a meaningful tax credit and aggressive interest-rate buy-down program, are necessary to stabilize the housing market, prop up home values and turn the economy around."
Under the FDIC proposal, lenders would agree to reduce the interest rate, defer some of the amount owed or extend the repayment period so that borrowers could afford to stay in their homes. In return, the government would guarantee that mortgage holders would be compensated for a portion of any losses should the home owner default on the reconfigured loan.
"NAHB believes that such an approach is essential in order to produce a significant reduction in impending foreclosures and commends the FDIC for its leadership in this area," said Howard.
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