The President was in Phoenix Wednesday unveiling his new proposal to deal with rising foreclosures nationwide. It's a plan that the president believes would help 9 million families.
520 N. 17th, 725 Orchard, 621 N. 7th; all houses listed on the county's foreclosure list. Wednesday the President said the country's housing crisis is the main cause of the recession. "But if we act boldly and swiftly to arrest this downward spiral then every American will benefit," said the President.
The President's plan would pay lenders $75 billion in subsidies to reduce mortgage rates for families facing foreclosure. Jon Lindman with Housing Resources of Western Colorado says this money will help people with sub prime loans who are currently in default or at risk. "It's going to help re–adjust their loans to actually 31 percent of their gross house hold income, monthly income," says Lindman.
In addition, the plan would provide money for Fannie May and Freddie Mac to re–finance "upside down" homes, worth less than their mortgages. Something Lindman says doesn't happen here to often. "Our market is pretty strong still and not having sustained the same dramatic reduction of evaluation, or valued cost as we hear even today in Phoenix," says, Lindman.
Other funding would go back into the system to make more mortgages available. Lindman says, "This is not a bail out for people who you know are in mortgages they shouldn't have been in, in the first place."
In his speech Obama said, "It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans."
If approved by Congress the Obama housing plan would take effect in March, meaning those in danger of foreclosure could have help just around the corner.
Richard Shelby the top Republican on the Senate Banking Committee is outraged by the plan saying it would pay people to do what they should already do: pay their mortgage.