Wednesday, February 18, 2009

Obama's Home Foreclosure Plan

Did any one get the remarkable irony inherent in the President's announcement of a $75 billion plan to benefit up 9 million borrowers for their primary homes from foreclosure?

First, the news aanouncement was made in Phoenix, Arizona -John McCain's home ground- and the state with the 3rd worst such problem.

Second, the President clearly stated the plan's guidelines, just at the time that Republicans were again questioning the whole idea.

Obama's clear response to critics:
The plan will not support irresponsible homeowners.
It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans.
It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell.
It will not reward folks who bought homes they knew from the beginning they would never be able to afford."

That sounds pretty clear to me.
But I expect this plan is way more complex than these statements can adequately cover.

There is much right with asking tough questions and that should certainly be done, as it probably has been and will continue to be.
But, there also comes a time when just asking questions doesn't accomplish very much that actually helps anyone.

These 6 questions are found in a letter from Republican Representatives Cantor and Boehner to Obama:
You decide whether these are designed to basically help -or hinder- the plan.

• What will your plan do for the over 90 percent of homeowners who are playing and paying by the rules?

• Does your plan compensate banks for bad mortgages they should have never made in the first place?

• Will individuals who misrepresented their income or assets on their original mortgage application be eligible to get the taxpayer funded assistance under your plan?

• Will you require mortgage servicers to verify income and other eligibility standards before modifying mortgages? Watch more on the home foreclosure crisis »

• 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?

• How do you intend to move forward in the drafting of the legislation and who will author it?


We'll see how this plays out and whether Congress will approve it in some version.
The point is, as much as the foreclosure problem has been described as the 'heart of our financial problem', nothing until now has actually been proposed to remedy it.
Will it work?
Probably, for those that qualify under the guidelines, but it will certainly leave many people without the help they hope for.
But, if it helps a significant number that will be worth the effort.
In the meantime, Obama again gets credit for trying something that many people seem to need and want, which is something no one else has bothered to touch.
I respect him for that, and the public should too..