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On Foreclosure

The Obama Administration's announcement today of a broad new effort to deal with the nation's foreclosure crisis represents, in part, a triumph for Senator Jack Reed and other members of Congress who have been agitating for a shift in strategy.

The initiative, which draws upon existing TARP funds, seeks to help millions of struggling homeowners by refinancing them into new, government-backed mortgages. It also includes a provision requiring lenders to provide unemployed borrowers with substantial reductions in payments for at least three months.

This expanded focus - from homeowners who took out risky mortgages, to unemployed homeowners who are driving a new wave of foreclosure concern - tracks with some of what Reed and others in Congress have been advocating.

"The Obama Administration’s foreclosure announcement today is a step in the right direction," Reed's office said, in a statement to N4N. "The foreclosure crisis is evolving and so is the Administration’s strategy."

But Reed was frustrated in his behind-the-scenes efforts to get Rhode Island included in a $1.5 billion program, announced by President Obama in February during a campaign swing through Nevada on behalf of Senate Majority Leader Harry Reid, that aides five of the states hardest hit by the housing downturn - Nevada, California, Florida, Arizona, and Michigan.

Reed argued, among other things, that the program did not take into account states like Rhode Island that have been particularly battered by unemployment - even if housing prices have not fallen quite as substantially, here, as in the five states included in the program.

The senator is pressing for new stream of funding in line with that doled out under the $1.5 billion program. We'll stay tuned.

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