NEW YORK (CNNMoney.com) - President Obama unveiled a $75 billion multi-pronged plan Wednesday that seeks to help up to 9 million borrowers suffering from falling home prices and unaffordable monthly payments.
Watch: Obama unveils housing plan
The long-awaited foreclosure fix marks a sharp departure from the Bush administration, which relied mainly on having servicers voluntarily modify troubled mortgages.
Obama, on the other hand, will make it easier homeowners to afford their monthly payments either by refinancing the mortgages or having their loans modified. The president is vastly broadening the scope of the government rescue by focusing on homeowners who are still current in their payments but at risk of default. And he puts billions of federal funds into enticing servicers to modify the loans of those who've already stopped paying.
Updated 12:58 p.m.
When will Obama and the rest of the Democrates get, the people dont want the stimulus and they know your bailout WILL NOT WORK. Take a good look at the spiral and tell me how do you make jobs in a bad economy. TAX CUTS TO BUSINESSES PUT PEOPLE TO WORK.
Let me see if I understand this. An individual buys a house they cannot afford; the person does not have the income to make the payments; does not have the downpayment; and when the variable rate ticks up, or the individual loses his/her job, the individual defaults on payments and there is a foreclosure. And we are upset because the home is being foreclosed, and Obama wants to save them? This is nuts. Unless Obama wants to turn us into a socialist welfare communistic state, why do we even care?
Most of these folks had NO BUSINESS buying the house they could not afford in the first place. Saying they did not know better is no excuse. Is the government policy now that we bail out stupidity?
Folks there is not enough money in the world to cure all these ills.
There's a lot that needs to be taken out of this proposal. Yes, the banks receiving government money should have to restructure mortgages. Maybe bankruptcy judges should be allowed to modify the terms of a mortgage but only if it's to extend the life of the loan. No, the government should not subsidize interest payments to bring monthly payments down to 31% of income. Who was dumb enough to borrow so much that more than 31% of their income would be spent on housing? And after approximately $1.5 trillion of bailout funds, why are we going to create a $10 billion fund to protect mortgage servicers and investors (banks??)? This is absurd. My house is worth less than it was 2 years ago and not one dime of this money will come my way. I borrowed what I could afford to pay monthly, have made my payments on time but now my tax dollars are going to pay for someone else's house??? I'd rather MY tax money go to buy a house for one of MY 3 adult children. Can someone send the money their way instead? I feel bad for those who have lost their jobs and fallen behind on their payments and they deserve some help but, those developments that sprang up overnight with people borrowing up to 110% of the price of their home should be left alone. We want to see the automakers in a "make it or break it" situation – why not those who overextended themselves? People do it every year and those who overextended in 1950, 1980 or 2000 were left to count their losses. The '06 – '08 should be treated the same.
Why should taxpayers flip the bill for this? Why not force lenders to lower interest rates so that borrowers can afford their payments? This is a win-win-win... (1) taxpayers are not liable, (2) borrowers stay in their homes, and (3) let's not forget that lenders are sill making money off interest... even if at 4%.
Hopefully the administration will be careful in helping only those who truly deserve to be helped.
For owners that are upside down, but were responsible enough to keep up their payments: How about mark to market on homes.
Banks have to refinance a new market price minus any principle paid off from the previous loan (i.e homeowners are "buying" their homes for the new value). Keep the loan length owners currently have left.
Banks take the bailout money for the difference.
People that are irresponsible loose their home and let someone that is responsible buy it at the new market value.
The irresponsible people can go buy a house in a neighborhood they can afford.
Obama, can you help me pay my rent. Seems I've been alittle low lately. Like buying food, electricity, phone. Can you spare me a dime.
Why is Mccain up there not being pushed down?
OOh I forgot, he is not planning to go away after he lost, neither our media planning to make him irrelevant and the palins!
THOSE OF US WHO PAY OUR MORTGAGES HAVE TO PAY FOR THIS, TOO?
Good job Obama!
You're addressing the issues that G.W. Bush and his GOP party chose to ignore.
America is grateful that someone is FINALLY making an effort to address the mortgage crisis.
That IS change.
What About the People who Lost their Jobs what About the People who cant Pay by no Fault of their own?
The market is tanking again.... I wonder why. This president is bringing us to very quick and irreversible ruin. I don't think we can wait four years. Our dreams are disappearing before our eyes so that the idiots who did not think and who did plan get all the benefits. God help us all.
THE CHANGE HAS BEGUN, THANK YOU MR. PRESIDENT, AMERICA'S PRESIDENT.
Rick, please go to a Republican blog. Your party now represents a minority view in this country. Of course, you are free to post but please help yourself. We are all laughing at you
"jaye February 18th, 2009 10:02 am ET
A simple fixed interest rate should solve the problem, and if it dosen't then the people bought way over their heads and will never be able to afford the home they're in.
I am so angry that the mortgage industry caused the mess our country is in."
People who bought way over their heads don't deserve to be able to afford the home their in. And nice of you to blame only the mortgage industy and not the fools who did buy over their heads.
Isn't that nice...people who bought houses that were out of their price range will be given free money (at my expense) to help keep them from losing the bank's house (notice I said bank...not theirs). That is what I get for working, saving, and trying to keep my own finances in order. I get to pay for Obama's loser friends! I guess bribing people to vote for you is okay in Illinois.
GEE–What happens when the market does turn around and property values go back up ??so who gets the windfall profits when the home is sold??the owner,the bank, the tax payers(government).This is just more stupid B.S.
Please give your money to the "needy" homeowners who bought houses they couldn't afford. Oh, and lets skim as much as possible off the top of this "bailout" (wink, wink) for me and my greedy rich friends.
The Dow tanked from almost 15,000 to 7500 under Bush.
Spend spend and spend!
I think I'll just quit my job...at least that way I won't have to pay the taxes this is gonna cost me.
mr. obama, your giving money to the servicers is balony!
USE THE MONEY EFFECTIVELY BY DIRECTLY LOANING TO THE PEOPLE!
allow people refinance from government!
use freddie and fannie!
THROW THE WALL STREET THIEVES OUT OF OFFICE INTO PRISON!
thre are plenty of conscientious and competent financial professionals
who would love to work for people at a fraction of the current CEO salary!
As usual the naysayers and ignorant feel they can comment on a plan that hasn't even been fully revealed. President Obama is doing what the moronic Bush Administration should have done months ago!
Can you people who are spewing from the partisan crap shoots just shut it. Just SHUT UP for once. I am sick and tired of Democrats bashing republicans and republicans bashing Democrats. Please for the love of God just forget the partisanship and come together and people for the good of all.
Randy from MD February 18th, 2009 9:49 am ET
"Wide-ranging plan to buffer against falling home prices and high-cost mortgages. Will use government money to subsidize rates and INSURE SERVICERS AGAINST DEFAULT."
Isn't that what sunk AIG?
No, bad actuarial computations on how to price the guarantees sunk AIG.