February 19th, 2010
02:24 PM ET
13 years ago

Obama unveils new housing aid program

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2010/images/02/19/art.boreid0219.gi.jpg caption=" President Obama's campaign-style event also served as a rally for Senate Majority Leader Harry Reid who is facing an extremely tough re-election battle this year."]
Henderson, Nevada (CNN) - President Barack Obama took his economic recovery agenda on the road Friday, unveiling a new housing assistance program at a boisterous town hall forum.

The campaign-style event also served as a rally for Senate Majority Leader Harry Reid, D-Nevada, who is facing an extremely tough re-election battle this year.

Reid "is a fighter," Obama declared in a packed high school gym. He "has never stopped fighting ... for middle class families."

The president "has a superb mind," Reid said, returning the favor. "I say no president, not even the great Franklin Roosevelt, had the problems this man has."

Obama, who carried historically Republican-leaning Nevada in 2008, also was scheduled to appear with Reid later Friday at an event with the Las Vegas Chamber of Commerce.

Obama used his trip to Nevada, which has been hit hard by home foreclosures, to lay out a $1.5 billion program to help borrowers in the five states most affected by the housing crisis.

The initiative calls for pumping money into state housing agencies in California, Arizona, Nevada, Florida and Michigan to fund programs to prevent foreclosure for people who are unemployed or who owe more than their homes are worth.

Also, the agencies would be able to assist homeowners having trouble securing loan modifications because of second liens, as well as promote affordable housing opportunities.

The initiative will be funded with money from the TARP bank bailout.

The money will be allocated based on a formula that takes into account home price declines and unemployment. The agencies' programs must be approved by the Treasury Department.

Obama's move is the administration's latest attempt to fix its signature foreclosure-prevention effort, the Home Affordable Modification Program, which has been widely panned for not doing enough.

The year-old initiative, which lowers qualified borrowers' monthly payments to no more than 31 percent of pre-tax income, has placed more than a million people in trial modifications. But it has given lasting help to only 116,000 homeowners, mainly by lowering their interest rates.

Consumer advocates and housing experts for months have called on Obama to expand the program to help the jobless and those suffering steep declines in their home value, two sectors that have received relatively little assistance from the modification effort. Administration officials repeated as recently as Wednesday that they were working on the problem, but that it was a complex issue.

Also, many homeowners with second liens have had difficulty getting into the loan modification program. In April the administration had announced a program that provides incentives for these lenders to work with borrowers, but only Bank of America has signed up so far, and it did so only last month.

A senior Obama official cautioned that the new program is just another tool in the White House arsenal, not a full solution to the housing woes facing the unemployed and people with "underwater" mortgages.

Friday's announcement shifts the burden of coming up with solutions to the housing agencies - organizations that are state-chartered but mostly operate independently.

Traditionally, these groups focus on affordable housing, providing assistance to first-time homebuyers and those with low incomes. Nationwide, they have provided mortgages to more than 2.6 million first-time purchasers and have financed 2.9 million low- and moderate-income apartments, according to the National Council of State Housing Agencies.

The majority of underwater mortgages are heavily concentrated in five states being targeted by Obama's proposal: Nevada, where 65 percent of mortgages meet the definition; Arizona, at 48 percent; Florida, at 45 percent; Michigan, at 37 percent; and California, at 35 percent, according to the research firm First American CoreLogic.

These states also have among the highest unemployment levels as well, with Michigan at 14.6 percent, Nevada at 13 percent, California at 12.4 percent, Florida at 11.8 percent.

Arizona has a jobless rate of 9.1 percent, which is better than the national 9.7 percent rate for January, according to the Bureau of Labor Statistics.

–CNN's Tami Luhby contributed to this report

Filed under: Harry Reid • President Obama
soundoff (44 Responses)
  1. Sniffit

    Enter rightwing nutjobs claiming he's just trying to buy votes...same jerkoffs who would've claimed that his failure to help the people losing their homes, etc., shows how awful he is. It's pretty godd-mn easy to be th eparty that doesn't have to do anything but criticize and everything with ideologically motivated hypocrisy...especially since nobody seems to pay any attention that they're talking out of both sides or their mouths.

    February 19, 2010 02:43 pm at 2:43 pm |
  2. WrongKindofChange

    Way to go Obama...buying votes in these states. If only he were doing it for the right reason...to help those that need help. Instead he's trying to buy the votes of key states for the upcoming elections. This is nothing more than a publicity stunt.

    What about all the other states where people are struggling to make their morgage payments? I guess they don't matter because they aren't states that are important in the upcoming elections.

    February 19, 2010 02:44 pm at 2:44 pm |

    Reid is done for sure now that he's got the Obama kiss of death.

    February 19, 2010 02:47 pm at 2:47 pm |
  4. Jimmy James

    All states where democrats are in trouble. Hmmm. Change we can believe in? What about the other states? Not important enough politically to take care of?This is another Louisana purchase, Cornhusker payoff. If he really cared he would help more in all 50 states not just where he has lost support. Then again he has lost support in every state. Rhode Island is near the top of unemployment. No critical race there so they get nothing.

    February 19, 2010 02:47 pm at 2:47 pm |
  5. Kathleen

    I hope Nevadians do NOT do what Massachusets
    party that cared about "the people: Reid has worked his a– off for ourCountry!

    Thanks Massachsetts! You voted for a guy ya hardly knew and He
    thought he won the Presidency.

    Reid is one of them like "Ted Kennedy" who got Massachetts HEALTH CARE FOR ALL and not only did Mass. turn their back
    on the rest of us who have no security with Health Care for our
    children and grandchildren, but they also turned their backs on
    "Ted Kennedy" and the whole Kennedy Family. Nevada, you
    got a person who care and will fight for you. But in rides a
    Tea Party Member in on a Red Truck! Yeah, go for it, vote for
    that one!

    February 19, 2010 02:51 pm at 2:51 pm |
  6. Kathleen

    Massachusetts? I quess I spelled it right this time, Well, let me check!

    February 19, 2010 02:53 pm at 2:53 pm |
  7. Steve (the real one)

    "I say no president, not even the great Franklin Roosevelt, had the problems this man has."
    Fully agree! Harry and Nancy were NOT in congress during FDR's administration!

    February 19, 2010 02:55 pm at 2:55 pm |
  8. Patricia in Las Vegas

    Welcome to Las Vegas, Mr. President. Please ignore the idiotic comments from our gin-sodden mayor. Evidently Oscar has killed too many brain cells. Thank you Mr. President for trying to teach fiscal responsibility. More people should listen and follow suit.

    The biggest problem in the Las Vegas housing market can be attributed to pure greed. People were buying and flipping houses like crazy trying to make a fast buck. In doing so they drove the prices up to a ridiculous high and people kept buying houses they couldn't afford hoping to sell for a profit and then when the bubble burst, they were caught with a house payment they couldn't afford. Or even multiple house payments.

    February 19, 2010 02:58 pm at 2:58 pm |
  9. Right Leaning Independent

    From packed stadiums to a packed High School gym! Oh how far he has fallen....

    February 19, 2010 03:07 pm at 3:07 pm |
  10. Ancient Texan

    And just when I thought we were on a "stop-spending" mode, the president thinks, "oh yeah, I just thought of one more way to bankrupt the country". There is no end to wild compulsive spending of money we don't have.

    February 19, 2010 03:33 pm at 3:33 pm |
  11. Caesar the Great

    So when do those of us that were fiscally responisble and didnt buy above our heads get handouts???

    February 19, 2010 03:38 pm at 3:38 pm |
  12. David

    Reid!? Pfffffffftt. What a joke. Nice try BO. But we will be running him out this next election.

    February 19, 2010 03:38 pm at 3:38 pm |
  13. Goodbye Harry......

    start packing your bags and don't let the door hit you in the ass on your way out......

    PS.....take that commie Pelosi with you....

    February 19, 2010 03:40 pm at 3:40 pm |
  14. J.Williams san diego

    Don't you just love it when he asked somebody if they had gambled in Vegas?? sort of a mea culpa move.. One character trait that Obama will never lose is of a very arrogant elitist, smarter than anyone that ever walked the earth. EVERYONE.

    February 19, 2010 03:41 pm at 3:41 pm |
  15. C. Farrell, Houston, Tx

    Keep going President Obama, there are millions of us who believe and support you because we are those who live for the future and not the past.

    February 19, 2010 03:41 pm at 3:41 pm |
  16. The lonely Libertarian of Liverpool NY

    Woo Hoo another bailout paid by the hard working minority of taxpayers of this nation.
    Projected national debt by 2020 100 trillion dollars.

    February 19, 2010 03:41 pm at 3:41 pm |
  17. Lando

    For all the good intentions that this President want's to do, there's
    always opposition to it....Hey, it's for everybody , not only for Democrats...shut your malicious brain

    February 19, 2010 03:43 pm at 3:43 pm |
  18. Hammerer

    What a pair!

    February 19, 2010 03:44 pm at 3:44 pm |
  19. Ranjit

    Mr. President, please visit state of Nevada before the elections. Try to to make atleast 3 or 4 trips and I can bet, Harry Reid will loose the seat by 10 points. After Obama's victory in 2008, he has not won a single seat for democrats. That might be because people don't understand his smart thinking and smart actions, right? What a comedy?

    February 19, 2010 03:47 pm at 3:47 pm |
  20. stillnot working

    ANYONE AND I MEAN ANYONE, who believes this is anything but a political prank to save Harry's political ass does not have a room temperature IQ. Now the world can see how we here in Illinois conduct politics. We need to take politics out of the people's hands(real people can not be trusted with something as powerful as a vote) and place it where it needs to be - with the corrupt people with power and money. If this is NOT buying votes – I'll kiss your ass and give you a half an hour to draw a crowd.

    February 19, 2010 03:59 pm at 3:59 pm |
  21. PJ

    I wish the President would distant himself from Pelosi and Reid who are both losers as far as Independents and many Democrats are concerned. I will vote GOP until Pelosi and/or Reid are dumped.

    February 19, 2010 04:01 pm at 4:01 pm |
  22. proud conservative

    Sorry to break it to you Kathleen, but Reid is going down in defeat. Take it from someone who actually lives in Nevada. Since you have no vote here, quit telling us who to vote for and shut the hell up!

    February 19, 2010 04:03 pm at 4:03 pm |
  23. Nice

    Massachusetts? I quess I spelled it right this time, Well, let me check

    but you spelled "guess" wrong........G and Q are almost next to each other on the keyboard............... Well at least on the same side of the keyboard.........

    February 19, 2010 04:05 pm at 4:05 pm |
  24. howie

    Now this is a pair that we should feel good about????????????????

    February 19, 2010 04:07 pm at 4:07 pm |
  25. RealityKing

    Harry will be the second democratic senate leader in a row voted out by his consituents. Great job democrats!!

    February 19, 2010 04:08 pm at 4:08 pm |
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