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Wednesday Feb 11, 2009

US to commit 50 billion dlrs to check foreclosures

US to commit 50 billion dlrs to check foreclosures

WASHINGTON, Feb 10, 2009 (AFP) - The United States will committ 50 billion dollars to prevent home mortgage foreclosures, the epicenter of global financial turmoil, under a financial stability plan unveiled Tuesday.

"Stemming foreclosures and restructuring troubled mortgages will help slow the downward spiral harming financial institutions and the real American economy," according to excerpts of the plan released by the US Treasury.

"We will soon be announcing a comprehensive plan" that among others will drive down overall mortgage rates, the Treasury said.

The government will "commit 50 billion dollars to prevent avoidable foreclosures of owner-occupied middle class homes by helping to reduce monthly payments in line with prudent underwriting and long-term loan performance," it said.

To drive down mortgage rates, the authorities remained committed to spend as much as 600 billion dollars for purchasing of mortgage-backed securities and debt, it said.

pp/rl - AFP

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