Obama Unveils Mortgage Relief Plan

By: Aaron Luna Email
By: Aaron Luna Email

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.

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  • by Joe Location: Grand Junction on Feb 18, 2009 at 11:22 PM
    Jobs stimulate our economy, not bailling out mortgage lenders who carelessly invested thier money in un-realistic loans. Mortgage lenders that allowed financing to borrowers know the risks involved. "Creative Financing" used by many State Licensed Real Estate Brokers has caused many Homeowners to enter into mortgages that are obviously beyond thier income. Not only did this contribute to the many defaults on mortgages, but truly robbed many of these first time buyers of the dream of owning thier own home. Now mortgage lenders are being more selective, a process that should have been followed a long time ago. If a mortgage company needs financial assistance by our Government for thier poor investments, they are in the wrong buisness and now they should reap what they have sowed. There are many who are going to have to live with thier choices, why should these mortgage lenders be treated any different?
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