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WASHINGTON (AFP) – President Barack Obama's administration on Friday announced new plans to help up to four million US homeowners who struggle to pay their mortgage because of unemployment or slumping house prices.
The measures would help hard-hit homeowners restructure mortgage payments, with specific breaks for the ranks of American unemployed and owners who owe more than their home is worth.
According to the Treasury Department, Friday's plans will help between three and four million Americans within two years.
The measures will tap into 50 billion dollars worth of funding already set aside to help the housing sector, which was at the epicenter of the global economic slowdown.
"These program adjustments will better assist responsible homeowners who have been affected by the economic crisis through no fault of their own," an administration official said ahead of Friday's announcement.
The administration has already spent hundreds of billions of dollars trying to stabilize the housing market and reduce foreclosures that have multiplied across the country since the peak of the financial crisis in September 2008.
But the slew of measures introduced by the Obama administration has so far struggled to stanch the bleeding.
Nearly two years after the crisis began, millions of homeowners still find themselves at risk of losing their homes amid wage cuts and job losses.
Nearly 10 percent of the US labor force remains jobless, and around 4.6 million Americans depend on unemployment benefits to make ends meet.
Millions more have found themselves in negative equity as cratering local real estate markets have pushed the value of their homes far bellow the value of their mortgage.
The new measures would aim at cutting mortgage payments to as little as 31 percent of income for some, helping the government "meet its goal of stabilizing housing markets and helping more Americans stay in their homes."
Supporters hope the plan can also firm-up the outlook for the US economy.
After suffering the worst economic crisis since the Great Depression of the 1930s, the US economy has again begun to grow, but weak housing and labor markets continue to drag on the recovery.
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