Administration Encourages Mortgage Relief

The U.S. government is expected to announce a plan Monday that will put increased pressure on mortgage companies to modify loans for troubled borrowers.

Under the current $75 billion Treasury program, companies that lower payments for troubled borrowers collect $1,000 initially from the government for each loan and subsequently get $1,000 annually for up to three years. The new program is expected to withhold payment on those fees until the mortgage companies make the mortgage modifications permanent.

The new plan also has programs that will encourage mortgage companies to expedite the loan modification process, according to Treasury spokeswoman Meg Reilly.

Source: The Associated Press, Martin Crutsinger (11/30/2009)