Bair: Not all will escape foreclosures

WASHINGTON, Feb. 19 (UPI) -- Foreclosures are inevitable even with a rescue plan, but the rate of foreclosures should lessen, U.S. FDIC Chairwoman Sheila Bair said Thursday.

"There will still be some borrowers who lose their homes to foreclosure. Some of that will be inevitable," Bair said on ABC's "Good Morning America. "But (a homeowners rescue plan) should have a significant reduction in the foreclosure rate, bringing it more in line to historical levels and decreasing unnecessary foreclosures."

President Barack Obama Wednesday unveiled a foreclosure protection plan that, among other things, will permit up to 9 million people to either refinance or modify their loans to get a lower rate.

"These unnecessary foreclosures are hurting everyone," she said. "We're in this endless spiral of unnecessary foreclosures, leading to further home price declines for everyone, then leading to further foreclosures."

Bair said the rescue plan should help between 7 million and 9 million mortgagees. Three million to 4 million would participate in the loan modification program, and 4 million to 5 million would participate in a Fannie Mae or Freddie Mac refinancing program to lower interest rates.

Bair predicted an "immediate impact in the increase of meaningful loan modifications" in March when the program becomes effective.