Commentary: Obama housing plan encourages short sales

04/6/2010 | CNBC

The Obama administration's Home Affordable Foreclosure Alternative Plan, which went into effect Monday, is aimed at encouraging short sales of homes because an earlier plan to encourage lenders to modify mortgages did not prevent foreclosures, Diana Olick writes. "[E]veryone gets a cut of government funds to get these troubled borrowers out of their homes and get them sold, even if the sale price is less than the value of the loan," she said. The administration increased the incentives offered by the program last week. The end result, Olick said, will be increased inventory that will water down prices.

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