Obama wants 90-day foreclosure freeze at bailed out banks

News item from the campaign trail this morning, from the A.P. via KTLA.com:

"Democratic Barack Obama on Monday called for more immediate steps to heal the nation's ailing economy, proposing a 90-day moratorium on home foreclosures at some banks and a two-year tax break for businesses that create new jobs."

More on the foreclosure freeze part of the proposal:

"Obama said that banks participating in the federal bailout should temporarily postpone foreclosures for families making good-faith efforts to pay their mortgage. 'We need to give people the breathing room they need to get back on their feet,' he said, adding that families living beyond their means share some of the responsibility.

I'll add to this post with more details as they become available.

--Peter Viles

Your thoughts? Comments? E-mail story tips to Peter Viles.

Photo Credit: A.P.

 

Comments

[MyLessThanPrimeBeef]

All that glitters is not gold, nor glittering promises golden.

Ask not what your country can do for you, and if you are too feeble to do anything for your country, it doesn't hurt to ask what you can do for yourself.

So, Indie, reach not for that golden cup. The Grail is within yourself and the quest for it is but a journey to transform yourself. Grab that plain, not at all flashy one.

[OverIt]

Ok, just a few questions spring to mind -

Does Obama really think postponing the inevitable for 3 months does anything constructive in the long run? Does he also believe everyone who bought a house in the last 4 or 5 years absolutely deserves to stay in that house?

The idea of giving companies a tax break (on top of the ones they already get and give themselves via creative accounting, but that's another story) sounds great until the point that it becomes apparent it will be us taxpayers who will have to make up that difference. Where else would it come from? Companies that can't afford to hire?

[ImMadAsHellAndImNotTakingItNoMore]

Wow, we got mc cain buying up mortgages directly with homeowners and another giving them free housing. I want a house too, why not give me some money, and with my downpayment, I am set for life. No one talks about us RENTERS.

[Lou]

Tweedle-Dee and Tweedle-Dum both running for President can't understand that most people in foreclosure couldn't afford their homes in the first place.

It so sad that our choices are two idiots.

[JW]

I am 60 years old and I NEVER thought that I would live in a Socialist or Communist country. Well.............we are now officially Socialist (whether the government wants to say it out loud or not).
Will we make the move to communism next?
It makes me want to puke.

[Giacomo]

These well-intentioned programs (I'd include some of McCain's bonehead proposals) will only prolong the pain and deepen the recession. FDR employed similar tactics during the Great Depression, and they were ruinous.

By raising taxes, mandating higher wages, artificially supporting high prices and persecuting big industries, FDR's administration pandered to a growing socialist sentiment -- and effectively crippled the economy for a decade. It took a world war to snap the U.S. out of the malaise he fostered.

[the problemwithcaring]

Ugh. Didn't I NOT vote for Hillary for reasons like this stupid pandering?

[CompaJD]

All this means is 3 extra months of living for free for the people that got in over their heads. Why doesn't he suggest a 3 month moratorium on rents also.

[Rainman]

This may all turn out to be moot anyway. Banks may delay foreclosures on their own, since there's a huge backlog of unsold homes. They could renegotiate loans with borrowers in danger of foreclosure. The could keep lenders in the original teaser rates and gradually move them to higher payments. Finally, many of these people have no equity stake in the houses in which they live; they've essentially been renting for a few years. They'll just have to move.

[MalibuRenter]

It's proposals like this that cause homeowners to continue to stay in denial, hoping the next bailout package will cure their irresponsibility, stupidity, or misfortune.

I have been stunned by media interviews of "unfortunate homeowners". Even telling their own story and with sympathetic reporters, you often have to ask "How could they have been this stupid?", or "It sure sounds like they knew they would stick it to the bank if prices went down". My favorite was a guy who said "I wouldn't have loaned money to me. I have no idea why the bank did."

[anonymous]

I think the goal behind the three month delay is to let the new government take office and take over. I'd feel a whole lot better about this huge mess if someone other than the current administration were calling the shots.

[JBW]

No one talks about renters because your contributions are simply not on par with homeowners. I'm not saying you are in anyway less of a person but your share of your landlord's property tax is so dissected and so low that you aren't contributing to public schools, bond measures, etc.

[marx and engels]

We never advocated for the redistribution of billions of dollars from the middle and working classes to the capitalist elite on wall street.

Stop calling it socialism!

[CompaJD]

"No one talks about renters because your contributions are simply not on par with homeowners. I'm not saying you are in anyway less of a person but your share of your landlord's property tax is so dissected and so low that you aren't contributing to public schools, bond measures, etc"

Yeah by not contributing you mean not getting in over my head and being a contributor to the current problems.

[TC]

"No one talks about renters because your contributions are simply not on par with homeowners. I'm not saying you are in anyway less of a person but your share of your landlord's property tax is so dissected and so low that you aren't contributing to public schools, bond measures, etc."

Behind every rental property there is a renter, paying the taxes.

My tax break on mortgage interest usually exceeds my yearly property tax.

Just sayin'

[joncmac]

Why stop at 90 days. Give more time to stabilize the markets, and help homeowners. The federal gov't FHA and Bank of America/Countrywide have committed to helping over 800,000 homeowners between them keep their homes. More info on the programs here.
http://www.needhelppayingbills.com/
html/help_with_mortgage.html

[Crash and Burn]

A two-year tax break for businesses that create new jobs is a step in the right direction to provide incentives to invest money during the oncoming recession. Generating cash to the little guy (with like a job) is exactly what will eventually end the recession. And although a 90 day moratorium isn't going to do much to help people keep their homes, it will help slow things down and stave off some of the panic of the last few weeks, and if the Executive actually did something other than sit there like a deer in the headlights during those 90 days, might even buy some time for action. But this proposal would cost you the TAXPAYER, 0 dollars, and would really do nothing to stave off the inevitable price corrections. When you compare this to McCain’s plan to outright buy these junk mortgages at FACE VALUE, and SEND THE FULL CHECK TO THE BANKS WHO MADE THE BAD LOANS at the FIRST PLACE, which would cost YOU THE TAXPAYER TRILLIONS of dollars, this sounds like a SUPER AlTERNATIVE TO ME!!!!

I guess some people didn't speak to their grandparents about the depression. My grandfather told me about a story how when his friends were being drafted for WWII, all of the guys were PO'd because they couldn't get into the army during the depression, and after the economy turned, then they got drafted. The massive government spending on public works (creating jobs) is what ended the depression. The US was woefully prepared for WWII when we joined in and industry was massively converted into the wartime industry after Pearl Harbor.

[SJ]

This kinda crap really upsets me. I have been trying to save for a home and chose not to buy one with an ARM because I felt there was a good possibility I would default on the mortgage. Now, they want to bail out the irresponsible people who did just that!

Amazing. This is not a free market.

Let the free market take its course, let the people who default on their loan move out, rent and regroup. Why is there no real voice for the resonsible people???