March 3rd, 2009
03:05 PM ET
5 years ago

Obama to test home loan do-overs

Mortgage modifications have a bad rap, yet President Obama is depending on them to stop the foreclosure crisis.
Mortgage modifications have a bad rap, yet President Obama is depending on them to stop the foreclosure crisis.

NEW YORK (CNNMoney.com) – Mortgage modifications have a bad rap, yet President Obama is depending on them to stop the foreclosure crisis.

Modifications continue to be pushed as the best way to get struggling borrowers back on their feet. The jury is out on whether modifications work long-term. One recent study showed about half of borrowers with modified loans fell behind within six months.

Still, Obama is giving modifications a central role in his $75 billion foreclosure prevention program.

The program, which starts on Wednesday, calls for loan servicers to lower struggling borrowers' interest rates to 31% of their gross income. The government will subsidize part of the reduction, as well as kick in incentives for the servicers, borrowers and mortgage investors to participate in the modifications.

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Filed under: President Obama
soundoff (61 Responses)
  1. Neel

    It makes me absolutely disgusted to read these comments... i don't know why i do it anymore. "chimp" this.. "chimp" that. "He is a loser". wow... please give him a second to put his policies in place. when they work we will see who the chimp is.

    March 3, 2009 03:53 pm at 3:53 pm |
  2. Hammer

    More help for the irresponsible and the deadbeats. Free healthcare, food, housing plus a check in the mail every month.
    Why work our government will provide everything we need and give us money for the things we don't.

    March 3, 2009 03:55 pm at 3:55 pm |
  3. bsmith171

    another stupid idea.

    must come from 'turbo tax' geithner.

    March 3, 2009 03:55 pm at 3:55 pm |
  4. matt

    Sandy- Get a clue, stop telling people to "stop stop stop" when you are so blinded by this media created demi-god...you are the sheep and the bottom line is THIS MORTGAGE PLAN of obama's proves, once again, "in less than 2 months" that obama was nowhere near ready to lead. Way over his head....

    March 3, 2009 03:56 pm at 3:56 pm |
  5. Griff............... on The Truth...

    This guy is distroying America, and the news media are standing by watching it happen... Why dont they say something that is True instead of gloryfying this Man???

    March 3, 2009 04:07 pm at 4:07 pm |
  6. cnnnewser

    I hope it works.... but I am just plain angry at these homwowners and their ignorance. Their "crisis" has ruined our economy.

    March 3, 2009 04:18 pm at 4:18 pm |
  7. Mississippi Mike

    Wow. I just can't believe what Obama is doing. He really is changing things, just not for the better. He is only prolonging the housing crisis and the recession we are in.

    March 3, 2009 04:22 pm at 4:22 pm |
  8. Proud American

    @ MATT -

    You're wasting your breath; you're arguing with a liberal...who's been tainted with "hope and change," and all the other buzz words uttered to get obama elected...

    March 3, 2009 04:22 pm at 4:22 pm |
  9. KLS

    To Les: Is this person lazy? Someone had a very good job and a mortgage for several years that they could easily afford. They did everything right but then lost their job & was unemployed for 6 months. Now employed but is paying less money so the mortgage payments are becoming harder to make.
    To bsmith 171: Is it a stupid idea to help the above person so their home isn't foreclosured? The more foreclosures in a neighborhood the lower everyone's home values drop.

    March 3, 2009 04:24 pm at 4:24 pm |
  10. Sam Sixpack

    How to steal your money in three easy steps:

    1) Spend lots of money "rescuing" poor-folk mortgages.

    2) Let "rescued" mortgages fail anyway.

    3) Let rich bank buddies keep YOUR cash.

    Meet the new boss — same as the old boss.

    March 3, 2009 04:36 pm at 4:36 pm |
  11. Bobbie in Maryland

    I'm tired of the negativity in this thread...watch out, people. You are going to be so surprised when President Obama's programs WORK for the Americans who need it!!

    March 3, 2009 04:45 pm at 4:45 pm |
  12. onemightylion

    I think before anyone can blame the people who bought homes they cannot afford, has to check first who initiated to allow them to buy those homes. The banks know these people cannot afford, but because of their greed to take what ever money they can milk from these buyers they lower the standards...knowing that if these people will lose the homes, they can resell it again... making more money for themselves.

    March 3, 2009 04:47 pm at 4:47 pm |
  13. Seen it all before

    It doesn't matter if it's a good idea or not. Obama's goal is to bankrupt America so he can make this a totally socialistic society. To see how good socialism works, check the former USSR.

    March 3, 2009 04:47 pm at 4:47 pm |
  14. Boston Irish

    @KLS – Supposing this "person", even though they are in a lower paying job and having difficulty keeping their mortgage payments up to date, still manage to take a week or two-week vacation because they have vacation time coming and just have to use it or lose it. What about them?? I think they should have not spent money on vacation and just stayed home until they got back on their feet. I know people who have done exactly as I described (took vacation) and are now going to be helped by the government because they cried "poor me". Is that fair to the ones who did NOT take a vacation because they wanted to keep up to date with their mortgage payment? No, it's not, but they are not in line for the government help. According to Obama, they are doing great – their mortgage is paid. Something is terribly wrong with this scenario. You tell me what it is O B A M A

    March 3, 2009 04:47 pm at 4:47 pm |
  15. Ken

    I do not remember a clause when I bought my home that said "if the home declines in value, the tax payers will come to your rescue". What ever happened to personal responsibility and personal accountability. I thought you were SUPOSED to buy within your means, and always leave some wiggle room. Oh, I remember, as a nation of ignorant voters, half of whom contribute NOTHING in taxes, we have voted in the next STALIN!!

    March 3, 2009 04:54 pm at 4:54 pm |
  16. Some Guy

    Seen it all before, Last time I checked, the former USSR was a communist country. Do some research instead of parroting back what Rush says because you want to appear smart and important like him. And it's how well socialism works, not how good

    March 3, 2009 04:56 pm at 4:56 pm |
  17. meh

    seen it all before> Don't be absurd. And try stepping outside your bunker once in a while.

    March 3, 2009 04:58 pm at 4:58 pm |
  18. Ken

    To onemightylion

    There is only one reason lending organizations lowerd their lending standards. They were forced to by the federal government by the Community Reinvestment Act. Liberal Policy at its best, is the direct root cause of this crisis, and big O's policies are making our chance of recovery worse.

    March 3, 2009 04:59 pm at 4:59 pm |
  19. Willy Brown

    How long do we have to wait to vote #44 out? Hurry time hurry.

    March 3, 2009 05:45 pm at 5:45 pm |
  20. jimbo

    seems to me that he should spend the bulk of time having the
    IRS audit the democrats taxes. That should take care of the defict.
    This guy promised change and hope. so far all I have seen is the
    same old crap with different people standing up and lying to the american people.

    We should be ashamed that we reelected anyone

    March 3, 2009 05:45 pm at 5:45 pm |
  21. Jeff Spangler, Arlington, VA

    Subsidies for the double-deadbeats have already been tested and failed. The economic truth is that some people simply do not have the income or earning potential to own homes. Wishing otherwise with Other People's Money won't change that truth.

    March 3, 2009 05:46 pm at 5:46 pm |
  22. shannon

    rewards for bad behavior, those of us who work hard and do it right, have to bail people out who over spent and bought houses they couldn't afford. The sense of entitlement that is present is disgusting. I don't want to pay for some loser to stay in his house for six more months. I have no problem with them living in an apartment. No thanks President Obama, perhaps you think rewards for bad behavior are good, I don't.

    March 3, 2009 05:47 pm at 5:47 pm |
  23. dotjet

    Hey Les . . . your ignorance is showing . . . . again!

    March 3, 2009 05:47 pm at 5:47 pm |
  24. gobama

    If u never fell behind on ur mortgage payments but everyone around u forcloses the value of ur house decrease. so stop crying ur getting helped also

    March 3, 2009 05:48 pm at 5:48 pm |
  25. arithmetic is liberal

    Socialism. If you hate socialism, please stop patronizing the following:

    If your house is on fire, please call a private sector fire squad. Firefighters are socialist.

    If your home is being robbed, please call a private security firm, since your Police Department is socialist.

    If we're attacked by terrorists, please call on the nearest mercenary army, since our army is funded by the government and therefor socialist.

    If you want to switch on a light, please generate your own electricity so you're not using our socialist power grid.

    Please do not drive on our socialist roads, or use our socialist libraries, don't drop your kids off at a socialist school, and please don't go hunting in a socialist wildlife reserve or take your boat out on a socialist game fishing lake.

    If you want to go online, don't, because our internet infrastructure is built on ARPANET, which was created by the government – more socialism!

    If you really believe that socialism, even a little socialism is the fru-its of the devil, then step away from your computer now, and never go online again.

    March 3, 2009 05:48 pm at 5:48 pm |
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