MESA – President Barack Obama confronted head-on a key source of economic anxiety for millions of Americans – the foreclosure crisis – promising mortgage refinancing options for those struggling to keep up with payments and relief for unemployed workers worried about losing their homes.
In a 22-minute speech Wednesday in Mesa, Obama detailed how the housing industry woes bedevil everyday Americans and Arizonans – even those who are not among the approximately 150,000 in the state in foreclosure or facing it. Even homeowners who can weather the mortgage meltdown suffer because their home’s value is diminished as neighbors are uprooted and their street is lined with empty houses and neglected yards.
“You can’t afford to leave, you can’t afford to stay. So you cut back on luxuries,” Obama told the more than 1,000 people crowded into Dobson High School’s gymnasium. “Then you cut back on necessities. You spend down your savings to keep up with your payments. Then you open the retirement fund. Then you use the credit cards. And when you’ve gone through everything you have, and done everything you can, you have no choice but to default on your loan
Unlike other tough times, families today can’t just sell their house and move into a more-affordable one. Phoenix area home prices have fallen 43 percent since 2006 and many homeowners now own houses valued far below their mortgages, Obama said.
The dire situation, Obama said, “is unraveling homeownership, the middle class and the American Dream itself.”
The Obama plan, estimated to cost $75 billion, would:
Give up to 5 million of Americans access to low-cost mortgagen refinancing.
Get rid of a restriction that stops mortgage giants Fannie Mae andn Freddie Mac from refinancing mortgages they already own or guarantee.
Create a $75 billion “Homeowner Stability Initiative” to keep sinkingn homeowners in their houses and protect neighborhoods.
Let the Treasury Department and then Federal Reserve continue buying securities backed by Fannie Mae and Freddie Mac mortgages to provide “stability and liquidity in the marketplace.”
The proposal’s goal is “rescuing families who have played by the rules and acted responsibly,” Obama said. No help will go to the irresponsible housing-market speculators whose gambles helped drive up home prices during the boom or dishonest lenders.
“In short, this plan will not save every home, but it will give millions of families resigned to financial ruin a chance to rebuild,” Obama said. “It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone Undoing the housing mess will require a new level of responsibility on the part of everybody, the president said.
“Government has to take responsibility for setting rules of the road that are fair and fairly enforced,” Obama said. “Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. And each of as individuals must take responsibility for their own actions. And all of us must learn to live within our means again and not assume that housing prices are going to up 20, 30, 40 percent every year.”
Although the gym event had the appearance and feel of a campaign rally, the crowd was for the most part subdued. Only a few minutes before Obama appeared did part of the crowd start chanting Obama’s name. When he entered the room, though, the crowd went wild with cheers, foot-stomps and camera flashes. Obama was interrupted several times by applause as he ticked off various parts of his plan. As he left, someone cried, “Mister President, we love you!”
Obama’s anti-foreclosure prescription earned kudos from members of the crowd.
Jerry Blake, 44, is an Air Force master sergeant stationed at Luke Air Force Base. He has orders to leave, but can’t sell his Surprise house.
“There’s hope. There’s hope,” Blake said. “I’m the same as everybody else, upside-down on my house payments.”
Nina Stewart, a 46-year-old Phoenix resident, was ecstatic that she got to shake the president’s hand. She praised his plan for extending to homeowners who haven’t defaulted yet.
“I have a job and I’m paying my mortgage, but I think my interest rate is higher than it needs to be,” said Stewart, an IT manager at Honeywell who “absolutely” supported Obama in the last election. “And, of course, my house value is lower, so how do I refinance at a lower interest rate? I’d hate to have to go into foreclosure to benefit (from government relief.)
Obama delivered his remarks from a lectern in front of eight U.S. flags. He was accompanied on the trip to Arizona by Treasury Secretary Timothy Geithner, Housing and Urban Development Secretary Shaun Donovan and Federal Deposit Insurance Corp. Chairwoman Sheila Bair.
Local dignitaries in attendance included Republican Arizona Gov. Jan Brewer; Democratic Arizona Attorney General Terry Goddard; U.S. Democratic Reps. Ed Pastor, Raul Grijalva, Ann Kirkpatrick and Harry Mitchell (in whose district the president appeared); GOP Maricopa County Supervisors Don Stapley and Max Wilson and Democratic Supervisor Mary Rose Wilcox, Mesa Mayor Scott Smith and a litany of mostly Democratic state lawmakers.
The Mesa audience also included high-profile Arizona Democrats such as Jim Pederson, a former state Democratic Party chairman and unsuccessful 2006 U.S. Senate candidate, and Carolyn Warner, a former state superintendent of public instruction and the 1986 Democratic nominee for governor.
John Goodie, the longtime Mesa activist who was instrumental in the city’s adoption of a Martin Luther King Jr. holiday, led some of the chanting.
U.S. Sens. John McCain, R-Ariz., and Jon Kyl, R-Ariz., did not attend, citing previous obligations.
0 Responses to “AZ Central – Obama unveils $75B mortgage relief plan”