- Kurt Rosene
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Obama’s Housing Plan Seeks to Help Homeowners in Trouble
Nine million homeowners can breathe a preliminary sigh of relief. They may get to keep their homes now that President Obama has unveiled his ambitious – and larger than expected — $75 billion mortgage relief plan. At the same time, the Treasury Department will double the size of its support of Fannie Mae and Freddie Mac. The government, which seized the mortgage finance companies last fall, will absorb up to $200 billion in losses at each company.
The massive Homeowner Stability Initiative is intended to help the five million borrowers who are said to be “under water” to refinance their home loans. Additionally, it provides incentive payments to mortgage lenders to assist as many as four million families who are either already in or on the verge of foreclosure.
Obama chose the Phoenix area as the venue for his announcement because it has been hit hard by foreclosures. He believes that putting a halt to foreclosures is key to turning around the economy. The plan is sound and proof that Geithner can deliver specifics and bold initiatives when he needs to.
It will be interesting to see if the President gets the bipartisan support that he wants from Congress to pass this vital legislation. Obama, who likes to strike a fine balance between hope and skepticism, describes himself as an eternal optimist – though anything but a “sap”. The Democratic majority in the House is comfortable enough that this legislation will ease through that chamber. When the bill moves to the Senate, however, Obama may once again need to twist a few Republican arms to avoid a filibuster.