More borrowers are expected to lose their homes to foreclosure as the nation’s largest mortgage companies lift their internal moratoriums on home repossessions and start to determine which troubled borrowers cannot be helped.

The mortgage companies say the Obama administration’s housing plan has given them a better idea of which borrowers they should assist, but their actions could be politically sensitive because some lenders received funds from the federal government’s financial stimulus program.

An increase in foreclosures could lead to a further decline in residential prices and put more pressure on the earnings of banks as they write off troubled loans.

Source: Wall Street Journal, Ruth Simon (4/15/2009)