3 New Anti-Foreclosure Strategies

Here are three programs that are considered promising replacements for the government’s Home Affordable Modification Program (HAMP), which has failed to stop foreclosures.

· Fannie Mae and Freddie Mac would be encouraged to refinance loans for some 30 million borrowers with high-interest rate mortgages. The new mortgages would be folded into a new round of mortgage-backed securities issued by the government-sponsored finance firms.

· The right-to-rent plan would offer delinquent borrowers an option of renting their foreclosed homes at a market rate for five years. At that point, owners turned renters would have another chance to buy their homes at market value. It’s a compromise. Borrowers lose their homes, but lenders have to accept lower payments.

· Mortgage cramdowns give a bankruptcy judge the right to consider all of a borrower’s debts and create a solution that would force all interested parties, including holders of mortgage debt, to compromise.