Gov't to unveil plan to shrink some home loans

[March 26, 2010]  WASHINGTON (AP) -- After months of criticism that it hasn't done enough to prevent foreclosures, the Obama administration is expected to announce Friday a plan to reduce the amount some troubled borrowers owe on their home loans.

People briefed on the plan said the effort will let people who owe more on their mortgages than their properties are worth get new loans backed by the Federal Housing Administration. It would be funded by $14 billion from the administration's existing $75 billion foreclosure-prevention program.

The people briefed on the plan declined to be identified on Thursday because the details had not yet been announced.

[Associated Press; By ALAN ZIBEL]

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