Help for 'responsible' underwater homeowners
A bank owned sign is seen in front of a foreclosed home on October 13, 2011 in Miami, Florida.
October 24th, 2011
11:23 AM ET
11 years ago

Help for 'responsible' underwater homeowners

(CNN) - The Obama administration's latest attempt to help the housing market targets homeowners whose credit is solid, who are up to date on their mortgage payments, but can't refinance because they own homes in areas where the market has plummeted and their homes are underwater.

So President Barack Obama is announcing his plan in Nevada, a key state the president must win in 2012 where the bottom has fallen out of the housing market. Since the peak of the housing market home prices have fallen 53%. In the Vegas metro area they fell by 59%. This official said there's been virtually no refinancing activity for underwater borrowers in the area and the plan is designed to change that dynamic.

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Filed under: Nevada • President Obama
soundoff (34 Responses)
  1. Bill from GA

    So, is story about "Help for 'responsible' underwater homeowners", or about Obama announcing a plan.

    I thought I might learn something by reading the article. Guess not.

    October 24, 2011 11:27 am at 11:27 am |
  2. Rick McDaniel

    That's just MORE wasteful spending.......seemingly, the ONLY thing Obama knows how to do!

    October 24, 2011 11:34 am at 11:34 am |
  3. Lynda/Minnesota

    "The administration official advises that these homeowners will no longer be required to get an appraisal, they won’t need a new full credit check."

    When my husband lost his 28 year job in 2007, we had 10 years left on our house mortgage. Because his new job equated to nearly half of his prior income, we were one of those many who were no longer able to meet our mortgage payments AND our daily living costs (gas, electric, food, insurance). Considering the collapse of the housing market, and the lowering of home values, we were stuck between trying to make ends meet, or refinancing. We chose to refinance ... which pushed our mortgage out an additional 5 years, and included the additional cost of the "new" appraisal, closing costs, credit checks, and numerous other little "expenses" always being added to mortgages. Eliminating these costs WILL help homeowners trying to refinance.

    BTW: It took less than 2 months before our new refinance was "bundled" and purchased by another bank.

    October 24, 2011 11:43 am at 11:43 am |
  4. Democrat Class Warfare - Destroying the economy, destroying the country

    Interference and manipulation of the market by Obama and the government only prolongs the problem or makes it worse with various unforeseen side effects. It is NOT the federal governments job to bail out people from their mortgage contracts. That cost is paid by somebody else, namely the taxpayers. If the government attempts to force the banks to eat these losses, then they will start going under or attempt to recapture that money via charges to its customers. But of course, Obama doesn't understand the first thing about how the economy works so this will be another Obama disaster.

    October 24, 2011 11:47 am at 11:47 am |
  5. aj

    I have family that lives in one of these regions the article discussed. About a third of their state is without industry because it has been outsourced. There is no larger businesses in the area now, and most dependent smaller businesses have either closed or are hanging on by a thread. Market values of housing have plummeted, and there is no people willing to buy houses there because there is no industry or quality of life to support it. My family's county has reduced their COUNTY's schools to ONE HIGH SCHOOL and 2 small middle schools – for the entire county. Needless to say – it's a bankruptcy trap. Most of these people are good people in the bible belt that have paid on their debts, until they have no more money to pay. This is just one region like this in America. Unfortunately, there are many. Bring our jobs back home!

    October 24, 2011 11:49 am at 11:49 am |
  6. diridi

    Banks took bail out money, they need to do it. Fix these Greedy Banks, and hold them to tasks....good luck.

    October 24, 2011 11:54 am at 11:54 am |
  7. Woman In California

    Well, at least someone is working and it's sure NOT the republicans in congress.

    Thank you Mr. President as the American people see clearly WHO is REALLY working for them versus who is not.

    October 24, 2011 11:56 am at 11:56 am |
  8. Four and The Door

    Because the government hasn't already blown enough tax dollars trying to play political games in the housing industry?!?!? This is an unfortunate situation certainly for some homeowners who bought at the top of the market. But why subject taxpayers to this liability? This is clearly overstepping the role of government and a ket reason why our government has $15 trillion worth of debt that is getting larger, not smaller.

    October 24, 2011 11:58 am at 11:58 am |
  9. Joseph Agunbiade

    The main problem is lack of solid credit. How can you have good credit when your house is under water? Obama, you need to ask the affected people for their problem and possible way to help. Your income decreased, you stop making regular payments on your debts, you start having negative credit rating, and you cannot refinance. That is it!
    Solution: Let the creditors reduce the principal and allow for modification in respective of credit score, As long as credit score is still the basis for any plan of action, there cannot be a difference.

    October 24, 2011 12:01 pm at 12:01 pm |
  10. Victoria AvgAm54

    The president is capmaigning now as the voice of average americans that the repubs in congress insist on ignoring! We dont want tax breaks for the richest, we dont want DEregulation, we don't want entitlements & the EPA to be eliminated, we dont want to pay sales tax on bread & milk we can't afford it! We dont want to be lied to about your role in the civil rights movement, we dont want DADT, we dont want to be told that our company we worked for for 40 years has closed and its our fault! We dont want increased military spending, We want to rebuild and invest in america, have fair tax rates and income equality, we want the REregulation of wall street, re-witten mortgages to stop forclosures, we want clean air, good schools, protection of our civil rights and a promise for a better tomorrow. Seems like everyone but the republican party politicians get that these days. Obama 2012

    October 24, 2011 12:03 pm at 12:03 pm |
  11. Padraig

    When the government steps in there is always trouble and it does not amount to any good. Who will support these new plans but us the taxpayers who already are paying enough. As aj put it, we need to have jobs brought back to this country. We don't need the extra police, fire, or teaches. They are important jobs but we need jobs that produce a product. Also, with the President's plan he will pay for one year and then turn it over to the states to pay. Pay with what? If we could afford them we would have them. The President continually yips at how this plan will work but it won't, President Clinton tried this and it failed. Wake up Mr. President and Congress – we need manufacturing jobs that produce a "product". From there we have jobs that will create new jobs and then you will have your tax dollars to squander with.

    October 24, 2011 12:04 pm at 12:04 pm |
  12. Wire Palladin, S. F.

    I like the president's plan a lot better than Mittens' plan to let the rich buy up all the houses and rent them out, eventually selling them for a huge profit when the market rebounds.

    October 24, 2011 12:09 pm at 12:09 pm |
  13. aj

    Should be noted that my family's state that I described above, in which about 1/3 of it the industry has been outsourced, leaving a vacuum of economic void is in fact a decidedly red, REPUBLICAN STATE.

    October 24, 2011 12:12 pm at 12:12 pm |
  14. Rudy NYC

    Many of homeowners really do need help because they found themselves victims of financial greed. The only mortgages being offered many times were the deceptive one, so I cannot blame all homeowners for their situations. But, sorting through it all, spending tax dollars on these bad mortgages, is really a waste. Where would the dollars eventually end up, anyway? The bucks would stop and come to rest at the banks. The housing market simply needs to go through its' contraction naturally. The money would be better spent investigating and prosecuting those responsible for the mortgage bubble.

    October 24, 2011 12:15 pm at 12:15 pm |
  15. Ed Latey

    Ask yourself, who is going to pay for this? Loan up to 125% of house value. What a sweet deal for everyone except all of us who will end up paying for it. This is not fair or exceptable. Enough is Enough! We can not afford 4 more years of this President............

    October 24, 2011 12:17 pm at 12:17 pm |
  16. Rudy NYC

    Four and The Door wrote:
    Because the government hasn't already blown enough tax dollars trying to play political games in the housing industry?!?!? This is an unfortunate situation certainly for some homeowners who bought at the top of the market. But why subject taxpayers to this liability? This is clearly overstepping the role of government and a ket reason why our government has $15 trillion worth of debt that is getting larger, not smaller.
    -------------
    Your rant would much more credible if the government has actually "played political games" in the housing market. What is it that the government has done? Don't forget now, that it was the GWB administration that passed TARP. Blaming Obama for TARP seems to have become the talking point of the election cycle among neo-cons.

    October 24, 2011 12:20 pm at 12:20 pm |
  17. Four and The Door

    Wire Palladin, S. F.
    I like the president's plan a lot better than Mittens' plan to let the rich buy up all the houses and rent them out, eventually selling them for a huge profit when the market rebounds.
    _______________________________________________________________________________________________
    " The rich to buy up all the houses..." That's rich all by itself!

    But no. Romney's plan is to control government spending and reduce the size of debt burden to the American taxpayer.
    Obama's plan is to do whatever he can to get re-elected regardless of what additional burden it places on the American taxpayer. I like Romney's plan better. I work and pay taxes.

    October 24, 2011 12:26 pm at 12:26 pm |
  18. westward

    Ed Latey, did you not realize that market values are only a fraction of what they were when these people bought their homes, hence the term 'underwater'.

    October 24, 2011 12:28 pm at 12:28 pm |
  19. Four and The Door

    Rudy NYC
    ...Your rant would much more credible if the government has actually "played political games" in the housing market. What is it that the government has done?
    ______________________________________________________________________________________________
    Fannie Mae and Freddie Mac. Two of the costliest failures in government history. How about that HAMP program Obama got going? Another waste of time failure. This new program would be destined to fall in line as an expensive failure just like the others. But Obama will never learn. He thinks he can just tax his way out of it. Fortunately, American voters are smarter than that.

    October 24, 2011 12:36 pm at 12:36 pm |
  20. Wire Palladin, S. F.

    @Dazed, you got that right at least, you are in a daze. I am in the 28% group for my federal taxes. I do not feel that wealthy republicans have had to share in the sacrifice for the Bush unfunded wars. Republicans have waged class warfare against the middle class and poor for 30 years, and something has to be done. Oh, another thing, I vote, I work and I pay a higher percent of my income in taxes that the wealthiest Americans.

    October 24, 2011 12:42 pm at 12:42 pm |
  21. Rudy NYC

    Four wrote two words.
    Fannie Mae and Freddie Mac.
    ----------------
    We don't know what that means and neither do you, but it sure sounds good. Why are you telling me that the program would be destined to fail? Are you seeing red?

    October 24, 2011 12:42 pm at 12:42 pm |
  22. Tax The Left

    @ Rudy NYC... I find it absurd that you want to prosecute these lenders for having broken NO rules. In fact, they were following mandate set by Bill Clintons admin back in '99, where they basically mandated the lending of money to otherwise unqualified borrowers. These so-called "victims" were victims of their own stupidity and their own greed... These "victims" bought houses knowing full well they could not afford it! many times, these "victims" also took out 2nd and 3rd mortgages on their homes to buy tech gadgets, new cars, etc and live it up well beyond their means. I was offered a sub-prime mortgage while living in Cali and chose not to accept it... why, because I read the small print and realized it was a bad deal. These "victims" knew full well what they were getting into... and if they couldn't read and comprehend the fine print... well then maybe they shouldn't have been buying a house to begin with!

    October 24, 2011 12:46 pm at 12:46 pm |
  23. Democrat Class Warfare - Destroying the economy, destroying the country

    The money would be better spent investigating and prosecuting those responsible for the mortgage bubble.
    ======================================================================================
    I agree!! Let's start by putting Barney Frank and all the other Democrats that created and protected FANNIE MAE and FREDDIE MAC in jail. ZERO has been changed there and the government has bailed it out with hundreds of billions with more to come. Democrats just LOVE to blame others for the nightmares and disasters THEY create.

    October 24, 2011 12:46 pm at 12:46 pm |
  24. Rudy NYC

    Four wrote:
    But no. Romney's plan is to control government spending and reduce the size of debt burden to the American taxpayer.
    --------------
    So, Romney's your pick?

    Government spending was under control until Republicans took power and drove the economy into a ditch. Personal tax cuts for wealthy individuals isn't going to create jobs. Lowering the corporate without *FIRST* getting rid of corporate welfare loopholes is pure hogwash. Cutting regulations didn't work for George W. Bush, and Obama has not enacted any new environmental regulations, which Republicans claim kill jobs.

    The "job creators" do not need more money, because they are sitting on two trillion dollars. The "job creators" need product demand to stimulate job creation, not another tax cut that returns nothing to the economy.

    October 24, 2011 12:48 pm at 12:48 pm |
  25. Tax The Left

    @ Wire Palladin, S. F... I'm sorry, are trying to suggest that "the middle class" is comprised entirely of people who are not Republicans? If that's the case they you sir are a complete idiot!

    October 24, 2011 12:49 pm at 12:49 pm |
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