Cramdown Jam — Monday Critical
If weather doesn’t shut down the government on Monday, it’ll be an important day on Capitol Hill for housing. Debate over a measure that would give bankruptcy judges jurisdiction to modify the principal on home mortgages of home buyers who’ve hit a wall hit an impasse last week and Monday’s the moment for it to come to the fore for resolution.
The Huffington Post picked up this analysis of the issue on mortgage cramdowns from CNN.
The so-called cramdown provision could put pressure on loan servicers to modify mortgages before borrowers file for bankruptcy.
A major critique of the voluntary modification programs is that servicers aren’t doing enough to help struggling borrowers. But servicers will likely be more aggressive in working with homeowners if they know that the borrowers can turn to judges for relief.
“Reforming mortgage bankruptcy laws is the only remedy available that will provide the stick to go with the carrots that we have offered lenders to modify mortgages voluntarily,” said Rep. Brad Miller, D-N.C., who worked on the legislation.
But congressional Democrats, who first introduced a bill broadening judges’ power two years ago, are running into trouble gathering the support needed to pass the legislation. The House postponed a vote on the measure until early this week after a group of centrist Democrats voiced concerns. And its future in the Senate remains in doubt with many powerful Republicans strongly opposed to the legislation.
The House bill would allow judges to modify loans originated before the legislation’s enactment. It would let the courts change mortgage terms to make a loan more affordable, permitting judges to reduce the principal to the property’s market value, a step servicers loathe.
If it snows 12 inches in DC Sunday night, the deadline may get pushed back and more deliberation could illuminate the complexities of the issue for members of Congress.
Other States Wonder, Is California Dreamin?
California, home to world entertainment capital Hollywood, has just attracted a new audience. As California begins to roll out a spending plan that allocates $100 million in new-home buyer tax credits so as to give new-home sales a cardiac jolt, other states’ legislators want front-row center seats to see how the plot develops.
Georgia lawmakers are considering a form of tax credit for home buyers, in addition to other stimulative programs to assist a new-home building economy that has seized up, according to Big Builder senior editor Lynn Norusis in an article called: “California Tax Credit Breeds Optimism.”
Whether The Golden State’s plan is a success–generating new-home reduction in inventory, jobs, and municipal revenues–or not won’t be known for months as a complex process of applying for the state’s new home purchase credit plays out.
California’s credit allows any primary-resident buyer of a new home–resales are not eligible–an amount equal to the lesser of 5% of the home purchase price or $10,000, with a total budget package of $100,000,000 enough available for approximately 10,000 to 12,000 new home sales. The credit begins March 1 and will last a year, or until the state appropriate runs out.
The program comes on top of a nationally available $8,000 home buyer tax credit that’s included in the stimulus package Congress and the President enacted into law on Feb. 17th.
Clearly, other states whose economies have relied on new residential construction to fuel revenue growth over the first part of the decade will be interested spectators. Some states, however, like Nevada, don’t have a state income tax via which to extend such a benefit.
Ben Bernanke in the House
Fed Chairman Ben S. Bernanke continued testimony on the state of the economy in Congress today, this time in the House of Representatives after a morning with the Senate yesterday. Here Rep. Ron Paul gets his moment in the spotlight with the Fed chief.
Ron Paul poses the question, “What if you wake up five years from now … and say, ‘I really messed up?’ What if you’re wrong?” Fed Chairman Bernanke’s reponse: “We’re not entirely in the dark.”
Highlights and Lowlights
This is taken directly from Ben S. Bernanke’s Semiannual Monetary Policy Report to the Congress, Before the Committee on Banking, Housing and Urban Affairs, U.S. Senate. Focus on what’s underlined and in blue (our emphasis):
Recent Economic and Financial Developments and the Policy Responses
As you are aware, the U.S. economy is undergoing a severe contraction. Employment has fallen steeply since last autumn, and the unemployment rate has moved up to 7.6 percent. The deteriorating job market, considerable losses of equity and housing wealth, and tight lending conditions have weighed down consumer sentiment and spending. In addition, businesses have cut back capital outlays in response to the softening outlook for sales as well as the difficulty of obtaining credit. In contrast to the first half of last year, when robust foreign demand for U.S. goods and services provided some offset to weakness in domestic spending, exports slumped in the second half as our major trading partners fell into recession and some measures of global growth turned negative for the first time in more than 25 years. In all, U.S. real gross domestic product (GDP) declined slightly in the third quarter of 2008, and that decline steepened considerably in the fourth quarter. The sharp contraction in economic activity appears to have continued into the first quarter of 2009.…
The principal cause of the economic slowdown was the collapse of the global credit boom and the ensuing financial crisis, which has affected asset values, credit conditions, and consumer and business confidence around the world. The immediate trigger of the crisis was the end of housing booms in the United States and other countries and the associated problems in mortgage markets, notably the collapse of the U.S. subprime mortgage market. Conditions in housing and mortgage markets have proved a serious drag on the broader economy both directly, through their impact on residential construction and related industries and on household wealth, and indirectly, through the effects of rising mortgage delinquencies on the health of financial institutions. Recent data show that residential construction and sales continue to be very weak, house prices continue to fall, and foreclosure starts remain at very high levels.
The financial crisis intensified significantly in September and October. In September, the Treasury and the Federal Housing Finance Agency placed the government-sponsored enterprises, Fannie Mae and Freddie Mac, into conservatorship, and Lehman Brothers Holdings filed for bankruptcy. In the following weeks, several other large financial institutions failed, came to the brink of failure, or were acquired by competitors under distressed circumstances. Losses at a prominent money market mutual fund prompted investors, who had traditionally considered money market mutual funds to be virtually risk-free, to withdraw large amounts from such funds. The resulting outflows threatened the stability of short-term funding markets, particularly the commercial paper market, upon which corporations rely heavily for their short-term borrowing needs. Concerns about potential losses also undermined confidence in wholesale bank funding markets, leading to further increases in bank borrowing costs and a tightening of credit availability from banks.
Recognizing the critical importance of the provision of credit to businesses and households from financial institutions, the Congress passed the Emergency Economic Stabilization Act last fall. Under the authority granted by this act, the Treasury purchased preferred shares in a broad range of depository institutions to shore up their capital bases. During this period, the Federal Deposit Insurance Corporation (FDIC) introduced its Temporary Liquidity Guarantee Program, which expanded its guarantees of bank liabilities to include selected senior unsecured obligations and all non-interest-bearing transactions deposits. The Treasury–in concert with the Federal Reserve and the FDIC–provided packages of loans and guarantees to ensure the continued stability of Citigroup and Bank of America, two of the world’s largest banks. Over this period, governments in many foreign countries also announced plans to stabilize their financial institutions, including through large-scale capital injections, expansions of deposit insurance, and guarantees of some forms of bank debt.
…
With the federal funds rate near its floor, the Federal Reserve has taken additional steps to ease credit conditions. To support housing markets and economic activity more broadly, and to improve mortgage market functioning, the Federal Reserve has begun to purchase large amounts of agency debt and agency mortgage-backed securities. Since the announcement of this program last November, the conforming fixed mortgage rate has fallen nearly 1 percentage point. The Federal Reserve also established new lending facilities and expanded existing facilities to enhance the flow of credit to businesses and households. In response to heightened stress in bank funding markets, we increased the size of the Term Auction Facility to help ensure that banks could obtain the funds they need to provide credit to their customers, and we expanded our network of swap lines with foreign central banks to ease conditions in interconnected dollar funding markets at home and abroad. We also established new lending facilities to support the functioning of the commercial paper market and to ease pressures on money market mutual funds. In an effort to restart securitization markets to support the extension of credit to consumers and small businesses, we joined with the Treasury to announce the Term Asset-Backed Securities Loan Facility (TALF). The TALF is expected to begin extending loans soon.
…
Strains in short-term funding markets have eased notably since the fall, and London interbank offered rates (Libor)–upon which borrowing costs for many households and businesses are based–have decreased sharply. Conditions in the commercial paper market also have improved, even for lower-rated borrowers, and the sharp outflows from money market mutual funds seen in September have been replaced by modest inflows.
…
In light of ongoing concerns over the health of financial institutions, the Secretary of the Treasury recently announced a plan for further actions. This plan includes four principal elements: First, a new capital assistance program will be established to ensure that banks have adequate buffers of high-quality capital, based on the results of comprehensive stress tests to be conducted by the financial regulators, including the Federal Reserve. Second is a public-private investment fund in which private capital will be leveraged with public funds to purchase legacy assets from financial institutions. Third, the Federal Reserve, using capital provided by the Treasury, plans to expand the size and scope of the TALF to include securities backed by commercial real estate loans and potentially other types of asset-backed securities as well. Fourth, the plan includes a range of measures to help prevent unnecessary foreclosures.
…
The Economic Outlook and the FOMC’s Quarterly Projections
… Policy makers substantially marked down their forecasts for real GDP this year relative to the forecasts they had prepared in October. The central tendency of their most recent projections for real GDP implies a decline of 1/2 percent to 1-1/4 percent over the four quarters of 2009. These projections reflect an expected significant contraction in the first half of this year combined with an anticipated gradual resumption of growth in the second half. The central tendency for the unemployment rate in the fourth quarter of 2009 was marked up to a range of 8-1/2 percent to 8-3/4 percent. Federal Reserve policymakers continued to expect moderate expansion next year, with a central tendency of 2-1/2 percent to 3-1/4 percent growth in real GDP and a decline in the unemployment rate by the end of 2010 to a central tendency of 8 percent to 8-1/4 percent.…
This outlook for economic activity is subject to considerable uncertainty, and I believe that, overall, the downside risks probably outweigh those on the upside. One risk arises from the global nature of the slowdown, which could adversely affect U.S. exports and financial conditions to an even greater degree than currently expected. Another risk derives from the destructive power of the so-called adverse feedback loop, in which weakening economic and financial conditions become mutually reinforcing. … If actions taken by the Administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability–and only if that is the case, in my view–there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery.
…
At the time of our last Monetary Policy Report, the Federal Reserve was confronted with both high inflation and rising unemployment. Since that report, however, inflation pressures have receded dramatically while the rise in the unemployment rate has accelerated and financial conditions have deteriorated. In light of these developments, the Federal Reserve is committed to using all available tools to stimulate economic activity and to improve financial market functioning.
…
Encouraged???
Big Day Among Big Days
9:00 a.m. S&P/Case-Shiller Home price data
10:00 a.m. Fed Chairman Ben Bernanke testifies befor the Senate Banking Committee; February consumer confidence
Noon Fed Governor Elizabeth Duke speaks
4:00 p.m. Stock Markets close
9:00 pm President Barack Obama addresses Joint Session of the Congress with the state of the union
Home Depot’s earnings came in, slightly better than analysts forecast. The operative phrase from Home Depot CEO Frank Blake:
“We expect the home improvement market in 2009 will remain just as challenging as 2008.”
ProSales Online reported yesterday that two more regional lumber yard operations have succumbed to the housing and economic crises, one of them a Missouri-based company that opened more than 150 years ago.
The two latest institutions to go out of business are Landreth Lumber, based in Bunker Hill, Ill., and Springfield Mill and Lumber in Missouri.
A spokesman for Landreth told ProSales today that its closure was involuntary–the result of Landreth’s bank deciding to stop providing credit to the 53-year-old southern Illinois institution. Shuttered were lumberayrds in Cottage Hills, Bunker Hill, and Jerseyville, Ill., as well as a manufacturing facility in Jacksonville, Ill. Roughly 60 employees lost their jobs.
…
In Missouri, the Springfield News-Leader reported today that Springfield Mill & Lumber will be going out of business in about a month. Southern Supply Co. has purchased a majority of the LBM operation’s inventory and hired more than half of its 20-person workforce, M. Lloyd Wright, owner of Springfield Mill &Lumber, told the newspaper.
Hold onto your hats.
Gear Still Engaged: We Hope your Plan Works, But…
Here’s a post on the Fix Housing First Web site, worthy of discussion.
Dear Mr. President
I am writing on behalf of the Fix Housing First Coalition, a diverse group of employers, organizations and individuals with over 10,000 members from throughout the country, to express our strong support for the Homeowner Affordability and Stability Plan which you recently unveiled.
The Fix Housing First Coalition was formed only a few short months ago by businesses and individuals at the front lines of our nation’s economic crisis. Builders, real estate agents and brokers, building material suppliers, home inspectors, home owners associations and thousands of potential homebuyers came together to support efforts to stabilize the housing industry as a way to lead us out of the current economic recession. Your foreclosure prevention plan addresses head-on the first prong of our coalition’s goal – preventing foreclosures by keeping homeowners in their homes.
Your plan is comprehensive and aggressively addresses the foreclosure portion of the housing crisis in this country. We applaud you for focusing on making monthly mortgage payments affordable for borrowers. Creating a set of national uniform standards for mortgage modifications will provide consistent and fair treatment of all homeowners. Creating a partnership between lenders and the government to reduce interest rates and payments for at-risk borrowers will surely alleviate the severe financial pressures which many homeowners are experiencing. Significantly, your plan will cause fewer foreclosed homes to end up on the market at artificially reduced prices further depressing home values.
We look forward to working with your administration and Congress to implement these initiatives to help families across the nation.
Clearly, however more needs to be done to stabilize the housing market for home owners, buyers and sellers. Further housing demand stimulus measures are urgently needed. These include reduced mortgage rates for all buyers and broader tax credits than those included in the recent economic stimulus bill. Without these important incentives, housing demand could take years to rebound creating further downward pressure on bank assets, home values, and housing-related jobs in the manufacturing and retail industries.
Again, thank you for your leadership on the foreclosure portion of the crisis and we stand ready to work with you to address the remaining obstacles to fixing our nation’s housing crisis.
Sincerely,
Ken Gear
Executive DirectorWe know that as the stimulus bill came together, economics became politicized, and politics became politics as usual. Even as new residential construction leaders try to plot Act II in an attempt to elevate their policy agenda, it seems that hunkering down and working through inventory as prices find their norm is the mode to get used to.
Roll Up the Arm Chair QBs
The Wall Street Journal posted this blog item on its Real Time Economics page.
A couple of snippets:
Obama’s plan is an ambitious one, more ambitious than analysts had been led to expect. It goes much further than previous proposals to stabilize housing. It will help reduce the number of “preventable foreclosures.” Whether it will stop the bloodletting, however, time will tell. House prices today have fallen 22% since peaking in June 2006, according to the Case-Shiller 10-city composite house price index. As a result, between 10 million and 15 million homes are “under water,” and the number is growing rapidly because house prices are in a freefall. The key question is how many of these homeowners will opt to walk away from their homes. Unfortunately, the historical data do not help in answering this question. – Patrick Newport, IHS Global Insight
The Obama administration doesn’t understand that there were two types of speculators during the housing bubble: flippers (they are excluded), and buyers who used excessive leverage hoping for further price appreciation. … This plan rewards those homebuyers who speculated with excessive leverage. I think this is a mistake. – CalculatedRisk
Expect the usual grousing about “moral hazard,” especially from Republicans who normally grouse about normal hazard. And under normal circumstances, they have a point. The government should not be bailing out mortgage lenders who should never have lent money to people unlikely to be able to repay, or borrowers who should never have taken out a mortage loan. … But these aren’t normal circumstances. … And a failure to put millions of homeowners on a firmer footing would send more shock waves throughout the economy. – Robert Reich
The new $75 billion foreclosure avoidance plan … from initial reports, continues the misguided efforts of the Bush administration and Congress to “keep people in their homes” at all costs. Such policies only end up disserving taxpayers, the economy, and troubled borrowers themselves. While all foreclosures are difficult, they are sometimes the least bad option for an individual borrower. They allow borrowers to walk away from both the home and the loan, at a cost to their credit rating, but not nearly as big a hit as they would take if they declared a personal bankruptcy. – John Berlau, director of Competitive Enterprise Institute’s Center for Investors and Entrepreneurs
Note that the economists that give their perspective are some of the usual suspects we tap into here at HC. The comments are where there’s real insight and scathing humor. A la …
I really need to stop paying my mortgage, which I undertook knowing the risks that real estate carries risk. I am tired of everyone getting a bailout. Why would the government incent lenders to renegotiate loans they made in order to keep them from having to foreclose a property that is now worth less than the mortgage amount? Isnt’ it already in the lender’s best interest to do so? I really wish I had over-leveraged my house to buy a nice car, then I could stop making payments, get $1K a year to start making them again, and have the lender eat car….what a country
Comment by dnvrjeep – February 18, 2009Oh the irony.Obama also wants to reward subprime borrowers by giving them $1k/year for five years for making their mortgage payments on time.
Umm…dude, they’re SUPPOSED to do that.
How come nobody gives ME anything for saving, being responsible, not buying more than I can afford and making my mortgage and credit card payments on time?
I’m sick of financing irresponsible people’s reckless spending. Let them go bankrupt!
Comment by – February 19, 2009Yeah, let’s just let ‘em all go bankrupt.
They’e your customers, idiots.Comment by – February 19, 2009
$75 Billion to $275 Billion for Housing Fix: Will it Work? Will it Help New Home Construction?
Can policy trump flagging confidence?
Photo: Courtesy of Reuters
The Obama housing rescue plan announced today is a bet that the answer is yes. From foreclosure-afflicted Mesa, Arizona, the President unveiled a plan to commit from $75 billion to $275 billion of U.S. Treasury and Federal Reserve funds on policy actions whose goal is to end a wealth-destructive stalemate between lenders and homeowners with troubled or potentially imperilled loans.
In an effort to break the forward momentum of a foreclosure tsunami economists and housing analysts predict could reach upwards of 8-to-10 million homeowners and deflate the value of millions of others’ No. 1 asset, the President and his team have designed a plan that has three principle elements aimed at helping 9 million people stay in their homes, as reported today in the Wall Street Journal.
The Obama administration’s plan has three main elements: an effort to help homeowners refinance; another effort to help stabilize the housing market through a $75 billion initiative aimed at reaching up to four million at-risk homeowners; and a third element that aims to drive down mortgage rates.
“The effects of this crisis have also reverberated across the financial markets,” President Obama said. “When the housing market collapsed, so did the availability of credit on which our economy depends.”
The administration pledges government money to separately entice homeowners, mortgage companies, and mortgage investors to rework loans. It would help a variety of homeowners, including those whose mortgage is more than the value of their home.
The housing plan is part of a broader effort by the government to address the volatile economy, and it comes after Congress passed a major stimulus package and the Treasury Department released its plan to shore up the banking sector.
- Here’s a link from the Journal to a transcript of President Obama’s prepared remarks detailing the new housing plan.
- Here’s a break-out of the plan toplines in bullet-point form, also from the WSJ.
- Here’s the version provided by the White House, from a link on The Big Picture blog.
Economists and housing experts’ concerns with the plan will take one of two essential points of objection. 1) While it may slow the damaging rate of foreclosures and ease the impact of adding new supply to an already glutted market of existing home inventory for sale, the plan does nothing to spark or prime the demand pump; and 2) While it may help homeowners who bought their homes in good faith and have gone underwater on their loans due to their home’s value declining, the plan aids too many people who took unscrupulous advantage of an easy-money era, either on the borrowing side or the lending side.
Here’s how housing economist/commentator Calculated Risk phrases his objection to part 2 of the plan:
For homeowners there are two key paragraphs: first the lender is responsible for bringing the mortgage payment (sounds like P&I) down to 38% of the borrowers monthly gross income. Then the lender and the government will share the burden of bringing the payment down to 31% of the monthly income. Also the homeowner will receive a $1,000 principal reduction each year for five years if they make their payments on time.
This is not so good. The Obama administration doesn’t understand that there were two types of speculators during the housing bubble: flippers (they are excluded), and buyers who used excessive leverage hoping for further price appreciation. Back in April 2005 I wrote: Housing: Speculation is the Key
[S]omething akin to speculation is more widespread – homeowners using substantial leverage with escalating financing such as ARMs or interest only loans.
This plan rewards those homebuyers who speculated with excessive leverage. I think this is a mistake.
Another problem with Part 2 is that this lowers the interest rate for borrowers far underwater, but other than the $1,000 per year principal reduction and normal amortization, there is no reduction in the principal. This probably leaves the homeowner far underwater (owing more than their home is worth). When these homeowners eventually try to sell, they will probably still face foreclosure – prolonging the housing slump. These are really not homeowners, they are debtowners / renters.
An assumption within this $75-to-$200 billion bet is that this massive redistribution of money, debt, and equity among those who struggle to pay their loans doesn’t backfire. If people who are capable of paying off their mortgages suddenly start mailing it in to get some of the government beneficence, the cure could start a massively more lethal sickness. Society depends, somewhat fragilely on the fact that most responsible homeowners covet a good credit rating, and regard paying their mortage as fulfilling an unbreakable promise. This ethic will get a good test as aid to so many homeowners seems only a missed monthly payment or three away.
Here’s the New York Times’ David Leonhardt on that sensitive issue:
A plan that does not aim to help all underwater homeowners, or anywhere close to all of them, has many advantages. About $500 billion worth of mortgage debt is now underwater, and the number may eventually get close to $1 trillion. A plan that tried to put this debt back above water would be vastly more expensive than the one Mr. Obama announced today. It would also deliver less bang for the buck, since a great majority of underwater homeowners are likely to continue making their monthly payments.
Likely to get high marks from most ideological sides of the spectrum are the initiatives to increase funding to Fannie Mae and Freddie Mac aimed at stoking liquidity and getting banks to resume lending, per the WSJ sum up.
· Promoting Stability and Liquidity: In addition, the Treasury Department will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities to promote stability and liquidity in the marketplace.
· Increasing The Size of Mortgage Portfolios: To ensure that Fannie Mae and Freddie Mac can continue to provide assistance in addressing problems in the housing market, Treasury will also be increasing the size of the GSEs’ retained mortgage portfolios allowed under the agreements – by $50 billion to $900 billion – along with corresponding increases in the allowable debt outstanding.
· Support State Housing Finance Agencies: The Administration will work with Fannie Mae and Freddie Mac to support state housing finance agencies in serving homebuyers.
· No EESA or Financial Stability Plan Money: The $200 billion in funding commitments are being made under the Housing and Economic Recovery Act and do not use any money from the Financial Stability Plan or Emergency Economic Stabilization Act/TARP.
The Associated Press reports on how Wall Street investors reacted initially to Obama’s new housing strategy. After the wild, gravity-borne gyrations that occurred in the moments U.S. Treasury Secretary Timothy Geithner opened his mouth last week to speak about what would happen with TARP money, a flat market is a virtual Wall Street thumbs up on the plan.
Clearly, if Obama’s plan can at least fulfill its promise of keeping 9 million people in homes they own, it will redound to stabilizing the most treasured asset among those who account for two-thirds of the U.S. economy, consumers.
Most denizens of housing — be it in for-rent, for-sale, market rate or low income — would count that as a good place to start.
Recovery Bill Doesn’t Go Yard, But Gets to First Base: NLBMDA
From PROSALES, By Craig Webb: All manner of groups will weigh in now that the American Recovery and Reinvestment Act is about to get President Obama’s signature.
It’s not what we wanted, but since our membership dues pay good money for lobbying on Capitol Hill, you can be sure that we got our money’s worth from those efforts.
Really, what you can be sure of is that the moment the $15,000 tax credit for home buyers of new and/or existing homes came off the table, and the 4% or less home mortgage buy-down got eliminated from consideration, many home building and remodeling related businesses felt their hearts sink. Ask many of he proprietors of these companies do they want a government hand-out, and they’ll tell you absolutely not. What they do want is for people to be able and willing to buy houses again, and this is what they doubt after Congress wiped out the Fix Housing First agenda.
Lumber yards will lose from this bill, despite some of the jobs, spending, and housing specific programs that the Democrats left in it. Here’s ProSales editor Craig Webb in a day-after analysis of plusses and minuses of the legislation.
The National Lumber and Building Material Dealers Association’s (NLBMDA) statement today on the bill mixed pleasure and disappointment with a resolution to continue lobbying for housing industry relief. NLBMDA applauded how the American Recovery and Reinvestment Act includes an extension of bonus depreciation and Section 179 direct expensing as well as creates, continues, or expands tax credits for energy efficiency. But it then said: “We are disappointed that Congress did not adopt the more robust $15,000 homebuyer tax credit, limited the application of the net operating loss carryback provision, and rejected an amendment to provide 4% mortgage financing under certain circumstances.”
The statement also quoted NLBMDA chairman Paul Hylbert as saying the group “will continue to work with Congress, the Administration, our housing industry allies and our members to achieve an effective housing recovery plan as soon as possible so that we can develop, once again, a robust and vibrant housing market as a critical element of a strong economy.”
Lots of groups hope the stimulus works, but aren’t exactly betting on it.
David Axelrod Connects the Dots on $50 Billion Housing Program Due this Week
David Axelrod was on media tour this morning, trying to ratchet spirits and expectations around President Barack Obama’s plan to map out a $50 billion-plus program to stem foreclosures and stabilize housing prices.
Here’s the topline from the Wall Street Journal’s account of Axelrod’s infomercial on what Main Street and the financial markets should expect in this week’s plotline.
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.”
Later, Axelrod zipped over to NBC’s studios in DC to to carry the crusade farther on “Meet the Press.” Here’s the clip.