The federal programs currently in place to help struggling homeowners will continue to have minimal effect on the foreclosure crisis unless significant changes are made.

For starters, principle reduction for underwater mortgages or qualifying hardships, like permanent disability or the death of a spouse, would help many people nationwide stay in their homes. The Federal Housing Administration (F.H.A.) requires lenders to provide matching funds to utilize the current version of that program. As a result few lenders participate. If matching funds were no longer a requirement, qualified borrowers could take advantage of that program.

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