Mr. Obama's Mortgage Plan to Focus on Lowering Payments ... Mr. Obama to the rescue

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Mr. Obama To the Rescue !


Summers Says Obama Mortgage Plan to Focus on Lowering Payments

By Rich Miller and Matthew Benjamin

Feb. 14 (Bloomberg) -- The White House is willing to spend more than the $50 billion already pledged to stem home foreclosures and intends to focus its efforts on reducing monthly mortgage payments, rather than principal, said Lawrence Summers, the president’s top economic adviser.

“We’re prepared to do what is necessary,” Summers said in an interview on Bloomberg Television’s “Political Capital with Al Hunt” yesterday. “Going directly at the problem means addressing affordability by addressing payments.”

Mounting foreclosures have hammered an already weakened housing market, helping to drive the economy deeper into recession. Economists surveyed by Bloomberg News forecast that gross domestic product will contract 2 percent this year, its biggest decline since 1946.

President Barack Obama will outline his proposal to deal with the housing crisis next week. The announcement will come after lawmakers voted on Obama’s $787 billion fiscal stimulus that’s aimed at restarting growth and providing for 3.5 million jobs.

Summers, who is director of the White House’s National Economic Council, said the economy will be in for a rough time for a while and that unemployment will continue to rise, even with the stimulus package.

“I fear the economy will probably be showing decline and jobs will probably be being lost for some time going forward,” Summers said. He added that the stimulus will probably prevent the unemployment rate from going above 10 percent, after it reached 7.6 percent in January.

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RELATED STORY:

JPMorgan, Banks to Halt Foreclosures for Three Weeks (Update2)

By Margaret Chadbourn

Feb. 13 (Bloomberg) -- Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp., Morgan Stanley and Wells Fargo & Co. agreed to suspend foreclosures while the Obama administration crafts a housing plan to modify mortgages for troubled borrowers.

Citigroup halted foreclosures through March 12, or when a plan is completed, the company said today in a statement. Wells Fargo said its moratorium was in place until a plan is announced. The other lenders said foreclosures will be halted on owner- occupied homes until March 6. JPMorgan Chief Executive Officer Jamie Dimon disclosed his actions in a letter to House Financial Services Committee Chairman Barney Frank released today.

Full Story Here: http://www.bloomberg.com/apps/news?pid=20601087&sid=aC7x_GWO2ic8&refer=home