WASHINGTON, Feb. 18 (UPI) -- A U.S. Chamber of Commerce official said U.S. President Barack Obama's foreclosure prevention plan could haunt the overall economic recovery process.
"While the administration's plan to stabilize the housing market is laudable," Chamber Executive Vice President Bruce Josten said, "if risky mortgages got us in to this crisis, extending those risky mortgages will only postpone the pain and hamper recovery."
"Additionally, the 'cram down' plan will create hundreds of separate mortgage modification policies and will extend uncertainty in the housing market, ultimately raising interest rates," Josten said.
The "cram down" plan refers to the administration's intention to grant bankruptcy judges the power to modify terms on home mortgages for borrowers in bankruptcy.
Obama said Wednesday the foreclosure plan was aimed at helping 9 million homeowners who "played by the rules" but found economic dynamics forcing their homes into foreclosure.
The plan includes $1.5 billion for relocation and help for renters who lost homes to foreclosure and $2 billion for neighborhoods where abandoned homes are reducing home values.
