When Obama speaks today in Phoenix, it is expected that he will reveal a housing rescue plan that will focus only on those homeowners who can no longer afford their mortgages and leave out those who have negative equity but are still able to meet monthly payments. "In coming weeks, his administration will begin spending $50 billion to entice banks to reduce the monthly payments of people who otherwise couldn’t afford to stay in their houses," reports The Times. "In effect, the government will split the losses on these mortgages with banks." The move amounts to a bet that most of those underwater won't walk away from their homes in the coming months. In the housing bear market of the early 1990s, a recent study found, only 6.4 percent of homeowners in the Boston area who were underwater ended up getting foreclosed on and only an estimated 1 to 2 percent walked away from their homes. Frankly, it's hard for us to see how this has any meaningful impact on the problem. Meanwhile, a civil disobedience movement is growing locally to fight evictions. “You want to haul us out to jail? Fine,” said Bertha Lewis, Acorn head and Ratner sell-out.
Bailout Likely to Focus on Most Afflicted Homeowners [NY Times]
Effort Takes Shape to Support Families Facing Foreclosure [NY Times]
