President Obama unveiled his $75 billion Homeowner Stability Initiative today, which could be a start to ending the foreclosure crisis that plagued 2.3 million Americans last year. While Obama acknowledged his plan won’t be able to save every home, he claimed it would stop “the worst consequences of this crisis from wreaking even greater havoc on the economy.”
To that end, Obama’s plan will help those homeowners facing mortgages more costly than the price of their homes, along with borrowers on the verge of foreclosure. That would be key to enabling 4-5 million Americans currently “under water” refinance their mortgages, and another 4 million people avoid foreclosure. The plan also “will provide forward-looking confidence” for Fannie Mae and Freddie Mac, as Treasury Secretary Timothy Geithner said.
But the question still remains how soon this money will get to the people who need it most, considering 10,000 Americans go into foreclosure every day. As Arianna Huffington recently put it, “‘The banks are too big to fail’ has been the mantra we’ve been hearing since September. But when you consider the millions of American homeowners facing foreclosure, aren’t they also too big to be allowed to fail?”
Until relief arrives, there are strong progressive voices and organizations stepping in to help. Dean Baker, co-director of the Center for Economic and Policy Research, says people facing foreclosure right now ought to have the option to stay in their houses as renters so that they can’t be thrown out in the street. And Rep. Mary Kaptur (D-OH), who famously called for homeowners facing foreclosure to stay in their homes, says the government shouldn’t be working out these loans. Rather, the government should get the FDIC and SEC to have the banks deal with the accounting and real estate assets on their books and work them out loan by loan. In other words, the government should be helping a horribly sick market heal itself.
We’re also seeing real action from ACORN, which just rolled out its Home Defenders campaign that soon will be coming to a city near you. The Home Defenders are volunteers who rush to the scene of an eviction, employing civil disobedience to prevent someone from losing their home. The bottom line is homeowners need to know what options are available right now in the midst of this crisis. They need to know they can find free legal advice and counseling, and that they can make their voices heard.
Homeowners absolutely shouldn’t be dissuaded by the Michelle Malkins of the world, who specialize in fearmongering and distorting the truth to prevent struggling Americans from seeking assistance. Malkin clearly doesn’t care about the millions of families for whom foreclosure is an immediate and all-too-real crisis. Her long-standing beef with community organizers and Brave New Foundation, while baffling, is at least understandable given her deeply right-wing views. But callously referring to the struggles of Americans facing foreclosure as “sob stories” is downright insulting.
