Thursday, July 22, 2010

Obama Mortgage Plan May Fuel Wave of Foreclosures

The Obama administration's effort to help those at risk of losing their homes is failing to aid many and could spur a rise in foreclosures that would further depress the housing industry.

More foreclosures would force down home prices and that would deter already-ailing homebuilders from starting new projects.

As a result, the economic rebound could suffer. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders.

"Foreclosures hold down the pricing for everybody," said Marty Mitchell, vice chief executive officer of Mitchell & Best Home Builders in Rockville, Md. "As a builder, we have to be cognizant of foreclosures, if there are more coming along, because it affects pricing across the board." (more)

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