February 17th, 2009
10:16 AM ET
13 years ago

Obama expected to announce foreclosure plan

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/POLITICS/02/17/obama.foreclosures/art.economist.cnn.jpg caption="Economist Peter Morici said $50 billion to $100 billion won't be enough to solve the mortgage crisis."]

(CNN) - President Obama on Wednesday will visit Phoenix, Arizona, one of the cities hardest hit with foreclosures, where he's expected to outline a $50 billion to $100 billion plan to help homeowners.

Though administration officials are tight-lipped about details, one idea that has been floated is for the federal government to reduce monthly mortgage payments by modifying loans.

Sheila Bair, the U.S. FDIC chairwoman, has advocated reducing payments to between 31 and 38 percent of a family's gross income.

"This crisis in housing has devastating consequences, and our government should have moved more forcefully to help contain the damage," Treasury Secretary Timothy Geithner said Monday.

"You're going to learn about [the administration's plan] as the rollout continues," said Jared Bernstein, Vice President Joe Biden's economic advisor.

Bernstein said it will be a "very aggressive plan to help responsible homeowners stay in their homes."

Full story


Filed under: Economy • President Obama
soundoff (135 Responses)
  1. Randy

    Fort Myers said everything you ever need to know about democrats. A bunch of back woods lazy dumb individuals with there hand out! Now I understand how BO can be elected, did not relize there was that many losers in this country.

    February 17, 2009 01:13 pm at 1:13 pm |
  2. Greg Pottstown, Pa.

    Chris February 17th, 2009 11:48 am ET

    Again, where was GWB and the republicans great ideas when this whole mess began. You had your turn now step back and let a real man lead us out of this mess.

    They were trying to regulate this problem but were filibustered by the dem congress including now POTUS Obama. Do some research. Obama and his ilk think that owning a house is a god given right. That is what got us into this mess. Obama was not around for the start of this but when he had a chance he did not vote for regulating this industry .

    February 17, 2009 01:14 pm at 1:14 pm |
  3. naqib

    800 Billion Stim Package
    800 Billion Bank Bailout
    65 Billion child education addition

    And now they start thinking about forclosures... another couple hundred billion...

    Dang... and I thought Bush spent a lot...

    February 17, 2009 01:16 pm at 1:16 pm |
  4. Lynn

    Why don't you naysayers and whiners wait to hear his plan? None of you will read it but will wait until Rush tells you what to believe!!

    February 17, 2009 01:16 pm at 1:16 pm |
  5. Listening to America

    I really appreciate the fact that Obama is working very hard to help us all.

    We may not agree on some of his or even congress' decisions, but at least we can all say that we see him working hard every single day.

    That in itself is change anyone can believe in. Remember Katrina.

    February 17, 2009 01:17 pm at 1:17 pm |
  6. Kevin in Ohio

    Responsible homeowners only? Does this include the idiots that over-extended themselves thanks to Barney Frank's and the liberals' desire to see everyone qualify for a mortgage? Heck, maybe I will just stop making my mortgage payments...then I can get on the Obama welfare state gravy train.

    February 17, 2009 01:19 pm at 1:19 pm |
  7. Michelle

    You need to help ALL homeowners regardless of whether or not they are in default. There are some good people who have sacrificed to stay in their homes and stay out of default who need a break too. I'm not a homeowner, so I won't benefit either way, but fair is fair Mr. President.

    February 17, 2009 01:20 pm at 1:20 pm |
  8. DebM, Allentown, PA

    Your comment is awaiting moderation.
    Dumas, seriously? The stock market tumbled because of the BILL??? J

    You don't think that maybe the stock market tumbled because of the California budget crisis? Or the fact that GM indicated over the weekend that they'd be going into bankruptcy without additional funds? Or any one of a myriad number of global economic warning signs?

    You Rush devotees continually prove what total numbskulls you truly are.

    February 17, 2009 01:23 pm at 1:23 pm |
  9. TexasAnnie *-*-*-*-*-*-*-*-*-*-*

    Solve the foreclosure crisis??? Well, how about the lending institutions work out repayment deals with the borrowers so they can just PAY their mortgages instead of the feds throwing money at the peoblem??

    February 17, 2009 01:24 pm at 1:24 pm |
  10. Greg Pottstown, Pa.

    Pakistan makes a deal to halt offensive against the taliban . Obama's response ???????????????????

    February 17, 2009 01:27 pm at 1:27 pm |
  11. Charles Atlanta

    Let's look at the plan first before make any negative comments. I believe the average of help for each home owner probably around $50k most (50 billions for 1M house.) So people can help on this bill won't suddently get rich. Just want to make sure the bill won't help those buying million-dollar house and wish govenrment to help out quarter millions.

    February 17, 2009 01:27 pm at 1:27 pm |
  12. smokesignals

    Dean in Florida seems to think that everyone who has gotten into trouble on their mortgages are stupid and/or greedy! All I can say is that he is an idiot and has no idea what some of us have and are continuing to deal with.
    There are plenty of people, just like me, small business owner, trapped by a failing economy and close to foreclosure, who lost all of their promised nest eggs by being forced to sell their homes at a much lower price. I saw the economic downfall starting two years ago, but it was already too late. I was one of the fortunate ones who was able to walk away with the mortgage paid for, but no money in my pocket. I did it to reduce my personal overhead by two thirds, rent a modest home and save my little business. Who is helping me? The bail out plan and help with foreclosures is coming waaaay too late, but I'm grateful for the Obama administration having moved so quickly to help others.

    February 17, 2009 01:28 pm at 1:28 pm |
  13. Griff

    You are Too-Big. You need to down-size your home-space. You want it all, and you want someone else to pay the Bill... The world does not waste space, like America..

    February 17, 2009 01:29 pm at 1:29 pm |
  14. Brent A. Pope

    I must say what a mess. Mit Romney is even trying to dump 1 of his 4

    Mansions for a cool 5.6 mill. complete with 9.5 bathrooms what belt

    tightening.

    As all the finger pointing continues and the average American gets

    caught in the cross fire of the Banking Greed, Wallstreet Greed,

    Governmental Slacking and Coroparate selling out of Americans. Its

    a wonder that no one wants to be apart of the fix. Everyone is running

    out of people to blame.

    We voted for change and change we got. Now we have a Government

    that is so far apart on all issues that it makes it difficult to create

    change.

    " STOP THE FINGER POINTING ".

    "SUCK UP THE FACT THAT ALL YOU CAN DO TO HELP,

    WILL ONLY HELP ".

    We all need a Government that care about it's citizens. Itsn't that why

    we go to war to fight for Human Rights? THE BATTLES WE HEAR OF

    EVERY DAY IN WASHINGTON ARE THE MOST SICKENING DISPLAY

    OF SELFISHNESS...................................................................

    February 17, 2009 01:29 pm at 1:29 pm |
  15. Jessica

    why is presedent Obama worried about every one else what i belive should be going on is he needs to be dealing with the nafta agreement. That is whats bringing our country down to the dirt, that is also why we have no jobs in the United States because they have all headed south. If he would do away with the nafta the jobs would come back to the american people. It would also put money back into our pockets..........

    February 17, 2009 01:29 pm at 1:29 pm |
  16. Jm in PA

    I am glad that some posters here are mad at the greedy AND the stupid.... we are so eager to attack anyone who is rich, as synonymous with greedy, but we don't focus on the idiots who think they can afford a $300,000 house on $40,000 a year. That is just plain common sense. My husband and I budget our $95,000 a year to pay for a $140,000 mortgage.
    In the end, some people will have to suffer. I agree with some of the other comments. Drop the mortgage rate to 4%. Enough with this handout stuff. With lower rates, I will likely refinance (I am at 6% fixed now), and maybe even be able to purchase one of these distressed properties as income-generating. Regardless, I will definitely have more money to spend, on whatever, with the slightly lower payment and there will be no government bill because of it. Yes, banks are making less money, but they are still making money.

    February 17, 2009 01:31 pm at 1:31 pm |
  17. Karen S Crow

    Umm .... part of the foreclosure "problem" is that people were getting into homes that were WAAAY over-priced .... OR homes that they quite simply could not afford, even on their BEST days.

    In the DFW area .... one of the news stations a few years back did an interview with a local mortgage lender. He was telling the reporter that he was hamstrung by gov't regulations that FORBID him from offering his professional opinion to clients seeking mortages. At the time of the interview, he'd already been in the business 15-20 YEARS and had plenty of experience with who and, more importantly, who wouldn't be able to keep up the mortgage payments once they were in their homes. He said clients had to SPECIFICALLY ask him his opinion before he could offer it to them .... regardless of race.

    MY question regarding the foreclosures .... How many were the result of VERIFIABLE predatory lending practices and how many were the result of people just getting in over their heads??

    I say help the first group & not the second. I stayed within reason (And my budget) and am paying my mortgage off in a few years & other than a possible home equity loan, at that time, for a metal roof .... I have NO intentions of going anywhere NEAR the mortgage market for a looong time. Too many sharks & no Roy Scheider in sight!

    February 17, 2009 01:32 pm at 1:32 pm |
  18. Karen S Crow

    jaye .. one thing ... John McCain does NOT own those properties .. His wife does.

    As a result of some iffy transactions with Lincoln Savings & Loan in the 8o's?? .... he & his wife split their holdings in His & Hers columns .... so that she could conduct business with corporations & other entities that if Sen. McCain had owned them ... could be viewed by some as rather suspect.

    Personally .. sounds goofy to me. But that's how the wealthy do things, I suppose.

    February 17, 2009 01:39 pm at 1:39 pm |
  19. Michael

    When Obama signs the bill it will be a historic moment. And not a positive one. This will do much more harm than good. This will create a budget deficit that will make the Bush deficits look like small change when added to the cost of the bank bailouts, the auto bailouts, the home mortgage bailouts and what is sure to be a defict spending general budget bill. Obama, Pelosi, and Reid are insaine, and half the American public thinks this is good. We will never be able to pay for this, America will never fully recover. The one term Obama Presidency will be change to be sure, change for the far worse

    February 17, 2009 01:39 pm at 1:39 pm |
  20. barack obama is still just B.O.

    great, let's give money to people who have shown no ability to manage their spending. Is that the american way?
    Sorry, it's the dimocratic way. Take from those who have worked hard to fulfil the american dream and give to those who want the american dream handed to them. Makes you want to work hard and sacrifice, doesn't it?

    Thank you my intelligent, (sarcastic laugh!), president.

    February 17, 2009 01:40 pm at 1:40 pm |
  21. Amazed

    31 to 38%???? How could someone ever be dumb enough to sign up for a mortgage that is so high – or apparently higher, if this is a "reduction" – a portion of their gross income?? You can blame the mortgage companies all you want – and there is plenty of blame to send their way – but it's still stupid and irresponsible for ANYONE to let themselves be suckered into these ridiculous loans that they ought to know bleeping well they cannot afford. I feel like MINE is too high, and it's about 25% of my gross. On the other hand, now that the mess is here, if it's truly bringing down the economy then there's nothing to do but....do something about it. I hate it but will be pleased if the plan can actually start turning things around.

    February 17, 2009 01:44 pm at 1:44 pm |
  22. HelloooOOOOO

    ?? Why Arizona ? McCain should refuse the money and so should the Govenor since they didnt support the bill anyways..Give the money to the states that DID support the bill...

    February 17, 2009 01:44 pm at 1:44 pm |
  23. pete

    Here is my plan. Let those who bought a home they couldn't afford give it back.

    Where is my relief? I live within my means, and now I have to bail out people who don't.

    On top of that, the stock market is down big time since Obama won. He's taking money out of all of my pockets. Why does he have a need to play in people's pockets?

    February 17, 2009 01:45 pm at 1:45 pm |
  24. Brian

    At one time we were a market driven economy. I don't like my home value going down, but that is a risk of a real estate investment. In 2004, Congress was warned and asked to act on the lack of regulation in the mortgage market (Freddie/Fannie) by the Bush. A bill Obama opposed along with Barney Frank and Chris Dodd. Since that way too many people who didn't deserve (finacially) to own a home or bought too much home. Now, we need to work these upside down investments through the market. How, bankruptcies and short sales. This would give responsible people the opportunity to buy nicer, better, maybe bigger homes the can now afford to pay for at current market prices... purchase prices and interest rates.

    I would be all for lowering these dead beats monthly payment if it were in the form of longer terms at fair market interest rates. Run a 15 year to a 30 year. Or create "special" 45 – 50 year mortgages for these offenders, but at a fair market value interest rate.

    February 17, 2009 01:47 pm at 1:47 pm |
  25. thomas

    There are still too many in Washington who fail to realize that the climate has changed. The economic crisis has produced worldwide consequences .This was all avoidable if due diligence had been employed in financial markets and in the economic health of small business and labor. This recovery will require new ways of thinking in how we address these issues. The old ways have failed and we have moved into a new age. The rules have to be rewritten.

    February 17, 2009 01:47 pm at 1:47 pm |
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