HUD Secretary Shaun Donovan announces new measures

• Redoubled efforts to re-finance troubled loans
• Emergency loans for unemployed homeowners
• HUD Secretary to focus like a laser on market trends

Housing and Urban Development Secretary Shaun Donovan has announced new plans by Washington to help roll back foreclosures and provide enhanced assistance to America’s unemployed. These proposals, which should go live in the next few weeks, include re-financing mortgages in the aftershock of plummeting July home sales.

“The July numbers were worse than we expected, worse than the general market expected, and we are concerned,” Donovan said on CNN recently. “That’s why we are taking additional steps to move forward.”

The administration’s re-financing program will be working on two fronts, Donovan explained:

• Revised loans for homeowners struggling to service current ones

• Emergency loans to unemployed borrowers aimed at saving their homes

“We’re going to continue to make sure folks have access to home ownership,” Donovan said.

Sales Down

Sales of new American homes fell in July to the lowest level in history, providing compelling evidence that the house market continues to be on the back foot despite lower prices and lower interest rates than have prevailed for decades. Sales were 12% lower than the previous month and, at just 276,000, the worst since authorities first kept records in 1963. Previously occupied homes fared worse – here the fall was 27% as the effect of tax credits waned and unemployment continued to bedevil the United States economy.

In annual terms, total home purchases of 3.83 million as recorded by the National Association of Realtors are the lowest in over a decade and below the most pessimistic forecasts of the nation’s economic analysts. Demand for single-family homes is the worst in 15 years, as the glut of homes on the open market bulged.

Prices Fall

The median price of American homes fell 1.6% during the period April to June 2010 reflecting the growth in lender inventories of  foreclosed homes. This was however an improvement over the drop of 3.2% the previous quarter.

The Housing and Urban Affairs Secretary would no be drawn on whether or not the $8,000 tax credit (which expired in April) might be revived. “All I can tell you is that we are watching very carefully,” he explained. “We’re going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers.”

The fresh proposals will be welcomed by the high number of American homeowners who are struggling to service their home loans in the face of ongoing buffeting by the staggering national economy. America is hoping that fresh proposals to extend the tax credit program will be supported, and add a further shoulder to the wheel.

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