Uncle Sam Gives Homeowners a Hand

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WASHINGTON - The federal government is considering some new measures to help some homeowners caught in the credit crunch.

With housing prices still falling, more and homeowners face a grim reality -- owing more on their home, than the market says it's worth.

Meaning more than 8-million nationwide -- or 10 percent of homeowners -- are now what's called "upside down".

"I know a lot of Americans are concerned about our economic future. Our overall economy has grown for six straight years -- but that growth has clearly slowed," President Bush said.

The New York Times reports the President, big banks, and lawmakers are looking for new ways to slow a predicted rash of foreclosures.

One proposal is using federal funds to refinance billions of dollars worth of mortgages teetering on the brink of default, and replace them with cheaper loans federally guaranteed, fixed-rate loans.

The plan could cost taxpayers plenty.

Policy makers tell the Times it's not a bailout although it would help thousands who borrowed for homes they can no longer afford.

The homeowner rescue plan comes on the heels of Project Lifeline -- a measure the President proposed to give borrowers 30-extra days to negotiate cheaper loans. But it's going to take time to see if the rescue efforts pay off.

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CBN News
Melissa Charbonneau

Melissa Charbonneau

CBN News White House Correspondent

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