Obama Addresses Foreclosure Crisis
by Deacon Blues
President Obama rolled out his plan to help homeowners yesterday, a $75 billion plan paid for from the bailout funds. It has two main components:
*A federally-funded refinancing program for "underwater" Fannie Mae or Freddie Mac homeowners; and
*A federally-backed loan modification program for those who aren't yet delinquent.
The biggest drawback to the plan is that it doesn't address homeowners who are underwater with non-federally backed mortgages, an estimated 13.6 million of them. To its credit though, the Administration is focusing the programs only on owner-occupied homes and not investment properties. And the industry already supports the loan modification program as a much improved effort than the hapless Bush plan from last year:
Jamie Dimon, chief executive of J.P. Morgan Chase, said that his company would voluntarily participate in the modification program and that executives at other large banks told him they also plan to participate. "We have to see the details, but what we see today looks terrific," he said in an interview. "We have been urging the government to have a national modification program for us to follow."
The plan has drawn qualified support from the Post editorial page, and a complaint from the Times that it doesn't go far enough. The administration was clearly trying to address achievable things here, and to keep the focus on stemming the bleeding and saving communities.
I'm sure the plan will be added to in the weeks ahead, and the biggest battle will be over Obama's proposal to let bankruptcy judges modify and reduce mortgages to allow homeowners to keep their homes. I only hope that the GOP opposes him on this, so he can beat their brains out.