Housing Crisis: President Unveils New Plan to Help Homeowners

A record number of Americans are now in danger of losing their homes.

ByABC News
February 19, 2010, 6:41 PM

Feb. 19, 2010— -- New numbers released today from the Mortgage Bankers Association show that foreclosure crisis is far from over in the United States. A record 15 percent of American mortgage holders are either in foreclosure or at least one payment behind, according to the MBA. In fact, in just the last year the percentage of mortgage owners who were delinquent by 90 days or more shot up from 6.3 percent to 9.67 percent, the MBA said.

And the increases did not stop there. The percentage of loans in foreclosure shot up from 3.3 percent to 4.58 percent in the last year, according to the MBA.

Chris Mayer, a professor of real estate at Columbia University, told ABC News today, "People have started to look at this and say, 'You know it just doesn't make any sense for me to keep making these payments.' And that, I think, is a problem that is growing."

Attorneys Nikki Allen and Chana Dorrough are two who can no longer afford to live in their homes, but they're still doing everything they can to hold on. Dorrough, who's looking for work, is now renting out her Georgia home. Allen's home in Maryland is in default, though she says she wants to stay in her house.

One year ago, President Obama unveiled attempts to stem the housing crisis, including a $50 billion program to encourage banks to renegotiate mortgages. It was supposed to help up to 4 million homeowners, but right now, only 116,000 borrowers have received permanent loan modifications.

The problem? Millions don't qualify for the program or were rejected by banks, including both Allen and Dorrough.

"I think people think I don't want to pay my mortgage," Dorrough said. "I want to."

New Program for Hardest-Hit States

The MBA found that one out of seven homeowners with a mortgage are struggling to make payments. And in Nevada, where Obama spoke about this issue today, that rate is one out of four.

In his latest attempt to alleviate the crisis, Obama introduced a new $1.5 billion program to help state housing authorities in the five states hit hardest by this crisis to come up with ways to help homeowners in trouble.

"This fund is going to help out-of-work homeowners avoid preventable foreclosures," he said.

Damage Control: Las Vegas Mayor Refused to Greet Obama

Turning from a housing crisis to a political one, the President also attempted to do somedamage control for some past remarks. Recently, he has taken some heat from Las Vegas after using the town as a metaphor for irresponsible behavior.

During a Feb. 2 speech the President said, "You don't blow a bunch of cash on Vegas when you're trying to save for college, you prioritize."

That comment came on the heels of another statement a year ago in Elkhart, Indiana that also took aim at the city. "You can't go take a trip to Last Vegas or go down to the Super Bowl on the taxpayer's dime," Obama said about bailed out companies taking employees on junkets.

Las Vegas Mayor Oscar Goodman took offense and is convinced that those comments from the President have hurt his city's tourism industry and demanded an apology. Today, he refused to greet the president at the airport.

"We have people who are in foreclosures, we have people who are having a hard time feeding their families, and we can't stand to have a flippant statement made," Goodman said.

So before leaving Las Vegas today, the President took a moment.

"Before I go any further," he said, "let me set the record straight: I love Vegas."

It was not the apology Goodman wanted but he seemed to back off that demand later today after Obama's visit.

"It's presumptuous of me to ask the president of the United States to say I'm sorry. That wasn't the objective of what I was trying to accomplish," the mayor told reporters.

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