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US unveils rescue plan for struggling homeowners

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US unveils rescue plan for struggling homeowners

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In what could be a lifeline for hundreds of thousands of hard-pressed homeowners, authorities in the United States have unveiled a plan to ease some mortgage payments.

Under the move, borrowers meeting certain conditions will be able to renegotiate their loan agreements with housing finance giants Freddie Mac and Fannie Mae. The aim is to cut the number of repossessions or foreclosures.

“Foreclosures hurt families, their neighbours, whole communities and the overall housing market. We need to stop this downward spiral,” Federal Housing Finance Agency Director James Lockhart told a news conference.

“Today, we are announcing a major programme designed to greatly reduce preventable foreclosures with a simplified, streamlined loan modification programme to get struggling home owners into mortgages that they can afford.

Bailed out by the US government in September, Fannie Mae and Freddie Mac own or insure 31 million mortgages – that is about 58 percent of all US single-family home loans.