Obama presses Congress to pass aid to homeowners

WASHINGTON Sat Feb 4, 2012 5:38pm EST

President Barack Obama discusses about the economy at Fire Station Number Five in Arlington, Virginia February 3, 2012.     REUTERS/Larry Downing

President Barack Obama discusses about the economy at Fire Station Number Five in Arlington, Virginia February 3, 2012.

Credit: Reuters/Larry Downing

WASHINGTON (Reuters) - President Barack Obama on Saturday pressed lawmakers to pass his proposal to provide up to $10 billion in aid to struggling homeowners, saying a failure to address the housing crisis would put the rest of the economy at risk.

"The housing crisis has been the single biggest drag on our recovery from the recession. It has kept millions of families in debt and unable to spend, and it has left hundreds of thousands of construction workers out of a job," Obama said in his weekly radio and Internet address.

Obama this week unveiled the details of a $5 billion to $10 billion program that would help homeowners take advantage of record low interest rates to refinance their mortgages. The assistance would be funded by a tax on large U.S. banks.

The housing initiative was one of several ideas Obama unveiled his annual State of the Union address to Congress last week.

Obama, who clashed repeatedly with House of Representatives Republicans over budget and tax issues last year, faces an uphill battle gaining traction for his domestic agenda in an election year.

Republicans gave a cool reception to the housing plan, saying it would mean too much government involvement in a key sector of the economy.

In his address, Obama acknowledged the challenges of pushing the legislation through a divided U.S. Congress. "As anyone who has followed the news in the last six months can tell you, getting Congress to do anything these days is not an easy job," he said.

Obama's handling of the economy, which has seen a sluggish recovery since the 2007-2009 recession, is likely to be the top issue in the November 6 presidential election.

In a report that could be helpful to his re-election prospects, the government said on Friday that the U.S. economy created a robust 243,000 jobs in January - the fastest pace in nine months - while the U.S. unemployment rate dropped to 8.3 percent from 8.5 percent in December..

(Reporting By Caren Bohan; Editing by Sandra Maler)

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Comments (10)
breezinthru wrote:
The banks should apply principal reductions for the homeowners who are still making timely payments on underwater properties. It’s in their own best interest to do so.

I’m still making payments on the modest home I bought six years ago for 210K, but I am living between two ramblers that are similar to mine… but empty. One of them recently went on the market for less than 80K.

I did not buy more house than I could afford and I did not buy several properties on speculation so I could make easy profits. Those people washed out of the market a long time ago. Those of us who are still making mortgage payments on underwater properties just bought a place to come home to after work each day.

At some point, I will be forced to stop making payments. I am approaching retirement and at that point I will no longer make enough money to continue… or I’ll die. Selling my house will no longer generate 150K to pay off the mortgage and I can’t expect a real estate agent to work for free.

The 50K I put down when I bought my home is gone and I know I’ll never get that back, but the current value of my house is approximately 80k. If the mortgage company takes it back from me that is all they can hope to get when they try to sell it again and they will have to pay a realtor, keep the pipes from freezing, and maintain the property, indoors and out, until it sells… and homes in my neighborhood are not selling.

Why not allow me to refinance now at the property’s current value and skip the whole foreclosure mess? I would keep making timely payments and stay here until I die. I won’t get rich, but I will probably live long enough to build up enough equity to cover the cost of a realtor.

Feb 04, 2012 8:08am EST  --  Report as abuse
Radical_1 wrote:
ABSOLUTELY NOT, NO PRINCIPLE REDUCTIONS! Do you ever stop to think what happens when the banks reduce the principle of a home? First the bank takes a huge hit and then they turn in that loss to Fannie, Freddie or one of the others, but the thing is in the end the TAX-PAYERS end up paying for these people that can’t afford their homes to be able stay in those homes. Now I know that some people bought with-in their means and are just a victim of circumstances, but all the same it doesn’t matter. Lifes thrown me many curve balls too, probably a lot more than most others and I always had to work my way through them- myself, well now it’s other people that had to take the curve-ball and now these babies all want the government to HELP them out of it, I say NO WAY! This isn’t a NANNY STATE and I’m not willing to make you or anyone else’s house payment. And we americans are sick and tired of paying for other peoples stuff no matter what sad sob story they have. Unless that story involves going to Iraq or Afghanistan and defending our country and coming back disabled, being a VET also I’ll gladly help them out but ANYONE ELSE NEED NOT APPLY!!!

Feb 04, 2012 9:39am EST  --  Report as abuse
Ollerus wrote:
There was a plan being floated a while ago where ( I believe it was a Congressman) had stated that instead of the stimulus plan proposed by Mr. Obama (which has been a miserable failure / waste of tax dollars that even the President himself has stated didn’t work to his expectations) to prop up ‘shovel ready’ jobs that money instead should have gone to the home owners in the form of paying the interest on their mortgages for one year.
Personally I think this plan was far more brilliant than anyone realized (especially Mr. Obama). Simply put a bailout gives my money to someone else, generally a corporation in the failed hopes that it will spur economic growth. Bad policy, however giving my tax dollars to the mortgage company to pay the interest on my mortgage for a year is essentially the same as giving me back MY MONEY! What would you have done if you did not have to pay the interest on your mortgage for a year? Pay off bills, buy a new TV, maybe a computer or a car?
The average American it was stated would have essentially seen a 15k raise in their pay due to not having to pay that interest. That would have had a much better chance in my humble opinion of spurring economic growth than the ‘stimulus’ did, sadly it would have saddled future generations with exactly the same debt however assuming it would have worked tax revenue would have begun to rise as people would have had money to spend.
Way to go Mr. Obama, again you propose exactly the WRONG way to fix our current situation, sadly the hope and change many of us bought has turned into a severe case of buyer’s remorse as we see almost daily you have nary a clue as to what you are actually doing.

Feb 04, 2012 11:46am EST  --  Report as abuse
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