Obama Outlines $75 Billion Foreclosure Plan

Posted February 18, 2009 at 12:19pm

President Barack Obama on Wednesday announced a $75 billion plan to help those in danger of foreclosure, saying the move was necessary not only to help distressed homeowners but to bolster the rest of the economy.

“In the end, all of us are paying a price for this home mortgage crisis — and all of us will pay an even steeper price if we allow this crisis to deepen,” Obama said during an appearance in Phoenix. “But if we act boldly and swiftly to arrest this downward spiral, every American will benefit.”

Obama warned that the initiative will not help everyone, including those who purchased homes speculatively hoping to “flip” them at a profit.

But he predicted it would help between 7 million and 9 million families restructure their loans and avoid foreclosure while boosting the housing market.

“By bringing down the foreclosure rate, it will help to shore up housing prices for everyone,” he said.

Obama also pledged his support for allowing bankruptcy judges to rework mortgages, a plan opposed by some Republicans.

House Minority Whip Eric Cantor (R-Va.) signaled possible confrontation ahead, releasing a list of a half dozen “common sense questions” about Obama’s proposals.

“What will you do to prevent the same mortgages that receive assistance and are modified from going into default three, six or eight months later?” Cantor asked.