First it was the banks, then it was the mortgage giants, and now it is real estate speculators who invested in multiple properties before the crash who are set to receive a taxpayer bailout.
Bloomberg News reported that in the Obama administration’s effort to prevent large swaths of foreclosures from destabilizing neighborhoods, it is expanding the Home Affordable Modification Program to landlords for up to four properties. The program, first introduced in 2009, pays banks to cut interest rates, elongate mortgage terms and, in some cases, forgive some principal debt. However, HAMP has yet to provide aid to as many borrowers as hoped.
“When we started the program we focused on owner-occupied houses because the need was so great and we wanted to target the efforts to that group,” said Tony Massad, the Treasury Department’s assistant secretary for financial stability. “Given where we are today, more and more people recognize that vacant properties are a problem no matter how they became vacant.”
Approximately 700,000 landlords could be eligible for mortgage help under the program, Bloomberg News said. Though many of those landlords are home flippers, and the Federal Reserve has said helping such borrowers is not a priority, it believes less restrictve programs present a more efficient remedy for the housing crisis. [Bloomberg]