WASHINGTON, Feb. 18 (Xinhua) -- U.S. President Barack
Obama on Wednesday revealed a mortgage relief plan in an effort to prevent more
Americans from losing their homes.
The plan is expected to help between 7 million and 9
million American families to avoid foreclosure, said the president in an address
in Mesa, Arizona.
President Barack Obama speaks about
relief for Americans facing home foreclosure at Dobson High School in
Mesa, Arizona February 18, 2009. U.S. President Barack Obama on
Wednesday revealed a mortgage relief plan in an effort to prevent more
Americans from losing their homes.(Xinhua/Reuters Photo) Photo Gallery>>>
"And we are not just helping homeowners at risk of
falling over the edge, we are preventing their neighbors from being pulled over
that edge too -- as defaults and foreclosures contribute to sinking home values,
failing local businesses, and lost jobs," he said.
However, the plan will only help those who played by the rules, he stressed, adding that it won't help speculators who took risky bets on the market or dishonest lenders who acted irresponsibly.
According to the president, the plan will make it
possible for an estimated four to five million currently ineligible homeowners
who receive their mortgages through Fannie Mae or Freddie Mac to refinance their
mortgages at lower rates.
This is designed to help millions of families are
"underwater," which means they owe more on their mortgages than their homes are
worth. These families are unable to sell their homes, and unable to refinance
them. So in the event of a job loss or another emergency, their options are
limited.
At the same time, the plan will create new incentives
so that lenders work with borrowers to modify the terms of sub-prime loans at
risk of default and foreclosure.
Sub-prime loans -- loans with high rates and complex
terms that often conceal their costs -- make up only 12 percent of all
mortgages, but account for roughly half of all foreclosures.
In addition, the plan will take major steps to keep
mortgage rates low for millions of middle-class families looking to secure new
mortgages.
Most new home loans are now backed by Fannie Mae and
Freddie Mac, which guarantee loans and set standards to keep mortgage rates low
and to keep mortgage financing available and predictable for middle-class
families.
"Therefore, using the funds already approved by
Congress for this purpose, the Treasury Department and the Federal Reserve will
continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities so
that there is stability and liquidity in the marketplace," Obama said.
The Treasury Department announced earlier Wednesday
it was doubling its financial support to the two mortgage finance giants to 200
billion dollars each in an effort to stabilize the real estate sector.
Meanwhile, the government will pursue a wide range of
reforms designed to help families stay in their homes and avoid foreclosure,
Obama said.
He said that his administration will continue to
support reforming our bankruptcy rules so that we allow judges to reduce home
mortgages on primary residences to their fair market value --as long as
borrowers pay their debts under a court-ordered plan.
"That's the rule for investors who own two, three,
and four homes. It should be the rule for ordinary homeowners too, as an
alternative to foreclosure," the president said.
Obama released the plan at a time when foreclosures
are soaring. In 2008, more than 2.3 million homeowners faced foreclosure
proceedings, representing an 81 percent surge from 2007.
A total of 8.1 million U.S. homes, or 16 percent of
all households with mortgages, could fall into foreclosure by 2012, according to
a report by Credit Suisse.
"The effects of this crisis have also reverberated
across the financial markets. When the housing market collapsed, so did the
availability of credit on which our economy depends," said Obama.
"As that credit has dried up, it has been harder for
families to find affordable loans to purchase a car or pay tuition and harder
for businesses to secure the capital they need to expand and create jobs," he
said.
Obama's strategy for economic recovery is a stool
with several legs, as he's said, and one of them is solving the foreclosure
crisis.
The administration is also working to stabilize,
repair and reform the nation's financial system in order to get credit flowing
again to families and businesses. A new financial rescue plan was released
earlier this month.
Just one day before the mortgage relief plan, Obama
signed a 787-billion-dollar economic stimulus bill into law in Denver, Colorado.
It is designed to jolt the ailing U.S. economy by providing government spending
and tax cuts for both individuals and businesses.
President Barack Obama speaks about
relief for Americans facing home foreclosure at Dobson High School in
Mesa, Arizona February 18, 2009. U.S. President Barack Obama on
Wednesday revealed a mortgage relief plan in an effort to prevent more
Americans from losing their homes.(Xinhua/Reuters Photo) Photo
Gallery>>>
WASHINGTON, Feb. 18 (Xinhua) -- U.S. President Barack
Obama is to reveal a 75-billion-dollar mortgage relief plan Wednesday in an
effort to prevent Americans from losing their homes.
"We will help between seven and nine million families
restructure or refinance their mortgages so they can avoid foreclosure," Obama
said in an advance copy of remarks he will make at an event in Phoenix, Arizona.
Full Story
WASHINGTON, Feb. 17 (Xinhua) --
U.S. President Barack Obama on Tuesday signed a 787-billion-dollar economic
stimulus bill into law in Denver, Colorado, calling it the first step to pave
the way to long-term growth.
The sweeping economic rescue package, the American
Recovery and Reinvestment Act, is designed to jolt the ailing U.S. economy by
providing government spending and tax cuts for both individuals and businesses.
Full story
NEW YORK, Feb. 17 (Xinhua) -- Wall Street dived
on Tuesday as investors were concerned that the U.S. economic stimulus package
would not be enough to revive the economy.
President Barack Obama signed the
787-billion-U.S.-dollar stimulus package into law on Tuesday afternoon. But
investors' enthusiasm has changed into uneasy speculation and the market is
waiting to see the real effect of the plans. Full story
WASHINGTON, Feb. 17 (Xinhua) -- The White House
on Tuesday released state-by-state details on the local impact of the
787-billion-dollar economic stimulus bill, which is designed to pull the United
States out of the worst economic crisis since the 1930s.
¡¡ The figures released by the White House included detailed estimates of how
many jobs the sweeping stimulus package would create in each state, and in each
congressional district as well. Full story
