Tuesday, April 10, 2012
The International Monetary Fund says the Obama administration's struggles to ease the U.S. foreclosure crisis show how high levels of household debt slow recoveries from deep recessions.
The IMF says in a report on household debt that fewer than 1 million mortgages have been modified under the administration's signature foreclosure-prevention program. That's far short of the program's initial goal of helping 3 million to 4 million struggling homeowners.
The report notes that the program had limited incentives for lenders and tight eligibility criteria for borrowers. It also says the program has not reduced monthly mortgage payments enough to restore affordability in many cases, noting that only 11 percent of permanent modifications included principal write-downs.