President Barack Obama's $75 billion foreclosure rescue plan is on the table. Two questions spring from his announcement Wednesday in Arizona.
» Will it work?
» Will Americans believe it will work?
Unless the answer to the second question is positive, the answer to the first cannot be. This harkens to the "fear itself" days of Franklin Roosevelt, when one of his major challenges was convincing Americans there was a way out of the tunnel and he could lead them.
The president is in a similar bind. He was elected on the rather vague twin promises of hope and change. And before there can be much change, there has to be the hope of better times, notwithstanding passage of a $787 billion solve-our-problems stimulus package.
The day after signing that hugely expensive package that sets government sailing into areas uncharted before, he announced his plan to stanch foreclosures. It, too, has a hefty price tag - $75 billion - that is 50 percent higher than what earlier had been suggested.
"All of us are paying a price for this home mortgage crisis," Obama said in remarks prepared to deliver at a Phoenix high school.
And that's true. Our neighborhoods deteriorate. Our home prices go down. But what he didn't say - as if we need to be reminded - was that now all of us will pay to try to fix the crisis.
It's an ambitious proposal, designed to prevent up to 9 million Americans from losing their homes. Not all will be saved, can be saved or even should be saved.
The initiative is designed to help up to 5 million borrowers refinance - if their mortgages are owned or guaranteed by Fannie Mae or Freddie Mac. It also provides incentive payments to mortgage lenders in an effort to persuade them to help up to 4 million borrowers on the verge of foreclosure.
Of the nearly 52 million U.S. homeowners with mortgages, about 13.8 million, or nearly 27 percent, owe more than their homes are worth, according to Moody's Economy.com. That indicates the size of the problem and underlines the fact that even with the White House's optimistic estimate of the number of families that can be helped, millions won't be.
Earlier, when Treasury Secretary Timothy Geithner went before Congress to explain the workings of the then-proposed economic stimulus package, the markets went into free fall. That was blamed on Geithner's lack of specifics. He offered an outline, not a plan.
Obama didn't seem to make the same mistake Wednesday, and while the market seesawed after the announcement, at least it didn't nosedive. That could reflect market exhaustion, or it could reflect market hope. But now that the package is in place, it will be up to Obama to be its chief cheerleader and salesman. He will be selling hope, and depending on how well he does, we could finally see change in the direction of the housing market.
http://www.recordnet.com/apps/pbcs.d...7/-1/A_OPINION
Великие умы обсуждают идеи. Средние умы обсуждают события. Мелкие умы обсуждают людей. (Э. Рузвельт)
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