Obama administration officials on Friday ramped up their attempts to help struggling homeowners, announcing major changes to the government’s much-criticized $75-billion program to modify mortgages to avoid foreclosures.<\/p>\n
The most significant change is a set of complex new incentives for banks and investors to reduce the principal on so-called underwater mortgages — loans for homes now worth less than what is owed.<\/p>\n
In addition, the administration announced that many unemployed homeowners could receive three to six months of reduced mortgage payments while they look for a job.<\/p>\n
Together, the revisions are designed to spur the Home Affordable Modification Program to reach its target of helping 3 million to 4 million homeowners avoid foreclosure through 2012.<\/p>\n
While the changes are significant to a year-old program that so far has helped just 170,000 homeowners receive permanently lowered mortgage payments, administration officials stressed they would only make a dent in the projected 10 million to 20 million foreclosures expected in the next three years.<\/p>\n