Among Talk of Stimulus, Obama Also Focuses on Mortgage Relief

The talk of the town is the stimulus package being kicked around congress, as well as thorough reporting on President Obama’s approach to getting legislation passed. In fact, the newspapers are rife with reports of Obama’s approach to bipartisanship, on his efforts to end "business as usual" in DC, and host of other political issues. Perhaps more important, however, is a $75 billion effort aimed at ending – or at least dampening – the foreclose crisis. The measure will attempt to prevent as many as 9 million foreclosures and to bring sense of balance to the housing market. The Treasury Department, in concert with the mortgage relief plan, will double its aid to Fannie Mae and Freddie Mac, the one-time stalwarts of American home financing and now little more than another pair of failed quasi-government institutions.

Obama’s plan will be announced later today and will be much more involved than initially expected (read: more expensive). The measure seeks to assist borrowers who owe more on their houses than they are currently worth, or so-called "underwater" borrowers. Said Obama, "All of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen."

For his part, Treasury Secretary Timoty Geithner noted that the support from his agency "will provide forward-looking confidence in the mortgage market and enable Fannie Mae and Freddie Mac to carry out ambitious efforts to ensure mortgage affordability for responsible homeowners." For those keeping track at home, the whole mess began when Fannie Mae and Freddie Mac, largely at the urging of Representative Barney Frank (D-Mass) and a handful of House Democrats, wanted to keep mortgages "affordable" for the "underprivileged." Translation: "let’s give people mortgages that have no business getting them and who likely won’t be able to pay them back." That, of course, didn’t work so well and was in direct contrast to urgings from such illustrious members of Congress as Senator John McCain (R-Arizona) and members of the Bush administration’s Treasury Department.