Obama Has 'Solid' Housing Plan

The Wall Street Journal reports, The Obama administration this week will announce a "good, solid" plan with the goal of stemming mortgage foreclosures and putting a floor under falling real estate prices, a senior White House aide said on Sunday.

David Axelrod speaks on "Meet the Press." Mr. Axelrod pressed the Obama administration's housing plan on the Sunday morning talk shows.

Speaking on "Fox News Sunday," senior adviser David Axelrod said the plan that President Barack Obama plans to announce on Wednesday will aim to stem foreclosures, provide immediate help to homeowners who are "right on the edge" of foreclosure, and ultimately help in "raising home values that have been plummeting."

Mr. Obama plans to unveil his housing plan during a visit to Phoenix. As part of his swing through western states, he is set to stop in Denver Tuesday, when he will sign the $787 billion economic-stimulus plan just passed by Congress.

Mr. Axelrod provided few details of the housing plan, but said a government investment of $50 billion to $100 billion to fund foreclosure prevention "is obviously a necessary part." He promised that the plan would contain "a lot of aspects."

In a later appearance on NBC-TV's "Meet the Press," he cited a letter Mr. Obama recently read from an Arizona homeowner as an illustration of the problem. "He showed me a letter the other day that was just heart wrenching from a woman in Arizona whose husband lost his job," Mr. Axelrod said. "He now has a job that's one-third the pay and they're really struggling to make their payments and meet their responsibilities. And she was emblematic of people all over this country."

One likely element of the plan would reduce Americans' payments on troubled mortgages, people familiar with the discussions said late last week, possibly through a cut in the interest rate, the costs of which would be shared by the government and mortgage servicers. Government officials would make the reduction available to people who are at risk of defaulting. A loan-modification program at government-backed Fannie Mae and Freddie Mac currently calls for holding monthly housing-related payments to 38% of pretax income. The new formula is likely to be as low as about 31%, according to some people.

In addition, the administration is expected to endorse a plan to allow judges to modify mortgages during bankruptcy proceedings in some circumstances, a move long opposed by the mortgage industry. And it could push measures that would remove some contractual obstacles that hinder mortgage servicers from modifying troubled loans. Pending any announcement, the country's three largest mortgage lenders are putting a temporary halt on foreclosures. MORE HERE