Coming Tomorrow: A Housing Solution?

A look at the speculation surrounding President Obama’s plans to stem foreclosures.

This is your first of three free stories this month. Become a free or sustaining member to read unlimited articles, webinars and ebooks.

Become A Member

Tomorrow, President Obama will announce (yet again) how he will save the country.

If expectations weren’t already high enough, the 44th President will have to explain just how he intends to stop and reverse the massive housing whirlpool that has been sucking the nation into an ever-expanding black hole of foreclosures, debt and homelessness.

The plan is expected to include a combined effort of government inducements to stall foreclosures and pressure on lenders to reduce mortgage payments. The exact type of “pressure” cited by government higher-ups is still unclear. Government subsidies on lower interest rates are a possibility, though one that may prove useless if the targeted borrowers are still considered risks and therefore still denied restructured loans.

Another option is to bestow new power upon bankruptcy judges to help increase borrowers’ bargaining power in restructuring mortgages and reducing payments—another possibility with drawbacks. Banks are concerned the new judiciary powers will keep investors from financing mortgages if they know the terms can be altered at a whim. Even so, some have agreed to halt foreclosures until Obama’s housing measures are officially worked out.

Other changes may include a 10 percent mortgage tax credit for homeowners who don’t itemize their taxes, standardized loan forms and other loan-modification efforts—though these methods have been criticized for their potential to either not do enough or destabilize the marketplace. Tomorrow’s announcement should reveal the real inner workings of the rescue effort.

Obama’s senior advisor David Axelrod insists spending between $50 and 100 billion is a necessary step (or a necessary evil) in light of the housing crisis. Foreclosure filings surpassed the all-time high of 3 million last year, and without government interference, industry insiders are concerned it will only get worse—some estimating that it will climb to as much as 10 million in the coming years.

In this case, the President may need more than a lifesaver.

Like what you’re reading? Get a browser notification whenever we post a new story. You’re signed-up for browser notifications of new stories. No longer want to be notified? Unsubscribe.

Tags: affordable housingwashington dc

×
Next City App Never Miss A StoryDownload our app ×
×

You've reached your monthly limit of three free stories.

This is not a paywall. Become a free or sustaining member to continue reading.

  • Read unlimited stories each month
  • Our email newsletter
  • Webinars and ebooks in one click
  • Our Solutions of the Year magazine
  • Support solutions journalism and preserve access to all readers who work to liberate cities

Join 1096 other sustainers such as:

  • Anonymous in Grand Rapids, MI at $10/Month
  • Mike in Roseville, CA at $10.00/Month
  • Davis at $10/Month

Already a member? Log in here. U.S. donations are tax-deductible minus the value of thank-you gifts. Questions? Learn more about our membership options.

or pay by credit card:

All members are automatically signed-up to our email newsletter. You can unsubscribe with one-click at any time.

  • Donate $20 or $5/Month

    20th Anniversary Solutions of the Year magazine

has donated ! Thank you 🎉
Donate
×