FORECLOSURE PREVENTION PLAN UNVEILED

NEW YORK (New York Times) – April 5th will mark the beginning of a new program by the Obama administration intended to end the foreclosure crisis — one that will pay homeowners to sell their homes.The program will allow owners to sell their homes for less than they owe and give them cash to expedite the process.

Hundreds of thousands of delinquent borrowers will be encouraged to sell their houses through short sales, in which properties are sold for less than the balance of the mortgage.

The new program will give the servicing bank $1,000, and another $1,000 may go toward a second loan, if one exists. The distressed homeowners will also receive $1,500 in relocation assistance.

Borrowers could suffer less damage to their credit ratings under the new program, and they will receive the lender’s assurance that they will not later be sued for an unpaid mortgage balance.