Donovan: Housing policy to move forward

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WASHINGTON, Aug. 29 (UPI) -- U.S. Secretary of Housing and Urban Development Shaun Donovan said Sunday the federal government would start two new programs to help struggling homeowners.

"We are going to be rolling out an FHA refinancing effort to help borrowers who are under water in their homes to get above water," Donovan said on CNN's "State of the Union" news program, referring to homeowners with mortgage loans larger than the current value of their homes.

"Second," he said, "we are launching an emergency homeowners' loan program for unemployed borrowers to be able to stay in their homes.

"The issue now and what we are focused on is the future."

Donovan did not give details of the programs, which were announced on the heels of a government report that said sales of new homes fell 12.4 percent in July and a trade group report that said existing home sales fell more than 27 percent.

Donovan said it was too early to conclude an $8,000 federal tax credit for first-time home buyers that ended in June should be reinstated.

He insisted the housing market, before the July slump, had improved since President Barack Obama took office.

"Compared to where we were … no question," he said.

He said housing prices had fallen for 30 consecutive months before Obama took over.

"When we came into office what was driving this housing problem was bad loans," he said. "Today, it's jobs."