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Federal home loan program targeting underwater borrowers enacted

September 07, 2010 02:15PM

A federal plan to try to halt the nationwide foreclosure crisis is going into effect today after months of planning, according to the Associated Press. The initiative, overseen by the Federal Housing Administration, specifically targets underwater borrowers, allowing lenders to grant loan refis to borrowers if they wipe out 10 percent of the original mortgage balance. Between 500,000 and 1.5 million homeowners could potentially be eligible for the program, which was first announced in March, the FHA said. Recent data shows that about 11 million homes currently have underwater mortgages, representing roughly 23 percent of all those with a home loan. [AP]