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Nearly 50% leave Obama mortgage relief program

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Saturday, August 21, 2010

HOUSING

Nearly half drop out of mortgage aid program

Nearly half of the homeowners who enrolled in the Obama administration's flagship mortgage-relief program have fallen out.

A new report issued Friday by the Treasury Department said that about 630,000 people who had tried to get their monthly mortgage payments lowered through the effort have been cut loose through July. That's about 48 percent of the 1.3 million homeowners who had enrolled since March 2009, up from more than 40 percent through June.

The report suggests foreclosures could rise in the second half of the year and weaken the ailing housing market, analysts say.

An additional 421,804, or 32.3 percent of those who started the program, have received permanent loan modifications and are making payments on time.

The Obama plan was designed to help people in financial trouble by lowering their monthly mortgage payments. Homeowners who qualify can receive an interest rate as low as 2 percent for five years and a longer repayment period.

-- Associated Press

ALSO IN BUSINESS

-- ShoreBank seized: Regulators closed a big community bank based in Chicago that has been known for its social activism but racked by financial troubles in recent months. It was one of eight financial institutions seized on Friday, bringing the total of failed U.S. banks to 118 this year.

The Federal Deposit Insurance Corp. took over ShoreBank, with $2.16 billion in assets and $1.54 billion in deposits. Urban Partnership Bank, a new institution comprised of several Wall Street firms and a private foundation, agreed to assume ShoreBank's deposits and nearly all its assets.


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