econ feb 21 - Foreclosure 1 Foreclosure Prevention Plan...

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Foreclosure 1 Foreclosure Prevention Plan Anna Veldman Economics 210-05 February 21, 2008
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Foreclosure 2 The proposed plan would allow about 600,000 homeowners to avoid foreclosure between this year and next year. The plan allows judges to reduce the amount borrowers owe, allowing them to keep their homes during the current mortgage crisis. Some people argue that this would increase costs for borrowers across the board while decreasing mortgage payments. The reduced amount would be based on the new value of the homes after the value of homes have been declining. This would not affect all homeowners, only ones who would be able to pay for their debt after the adjustment. Congress is trying to help out the economy and help the housing market recover. Lenders however are not fond of this proposal as it would give judges control over their mortgage proposals. These reductions based on the amount the home value had decreased are called cram-downs. Recently, there have been fears of a recession, and the housing market is only one
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This note was uploaded on 04/07/2008 for the course ECO 210 taught by Professor Sun during the Winter '08 term at Grand Valley State University.

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econ feb 21 - Foreclosure 1 Foreclosure Prevention Plan...

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