Obama Unveils Sweeping Mortgage Relief Plan

Obama Unveils Sweeping Mortgage Relief Plan

President Obama today announced details of the Homeowner Affordability and Stability Plan, which could help up to 9 million families restructure their mortgages to avoid foreclosure.

Obama unveiled the $75 billion mortgage relief program in a speech in Mesa, Ariz., which is located in a region that has been hit hard by foreclosures and falling home prices. “In the end, all of us are paying a price for this home mortgage crisis,” the president said. “And all of us will pay an even steeper price if we allow this crisis to deepen — a crisis which is unraveling homeownership, the middle class and the American Dream itself.”

The key components of the plan are:

1. Refinancing for up to 5 million responsible homeowners to make their mortgages more affordable.
2. A $75 billion homeowner stability initiative to reach up to 4 million at-risk homeowners.
3. Supporting low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac.

“We are not just helping homeowners at risk of falling over the edge, we are preventing their neighbors from being pulled over that edge too — as defaults and foreclosures contribute to sinking home values, failing local businesses and lost jobs,” Obama said. But he stressed that the relief plan would not “rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans.”

The White House provided a detailed summary of the plan here, while this Treasury Department document offers case studies explaining how three types of homeowners might benefit from the plan.

The Wall Street Journal answers a few of the biggest questions about the mortgage relief plan here.

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