Household HSBC Watch

American states such as New York, Massachusetts and Ohio collectively will extend more than $500 million (£245 million) in bailouts to homeowners struggling to meet loan repayments in an attempt by officials to prevent worst-hit neighbourhoods from declining amid repossessions.

With more than 700,000 American households set to lose their home this year and growing impatience with the federal Government’s response to the mortgage meltdown, individual states are moving to reduce the problem. Massachusetts has made the biggest commitment so far, setting up a $250 million fund to prevent about 1,000 “delinquent” borrowers from losing their homes. New York is expected to announce a $100 million bailout in the next few weeks, which would help about 500 homeowners in the state.

Maryland, New Jersey, Ohio and Pennsylvania are also working on bailouts as they strive to prevent pockets of housing from being dragged too far down by a surge in repossessions, which can prompt a downward spiral as neighbours sell up and house prices plunge.