obama housing plan Evaluating Obama's Housing Plan

obama housing plan

President Obama has unveiled his housing plan a day after signing his stimulus into law. The Housing Plan has been eagerly awaited, as the stimulus has been subject of much controversy and the banking bailout has been met with disapproval.

The housing plan is essentially two fold. Part of the plan is aimed at reducing mortgage payments for those paying them, and another part of the plan involves making loans to people from the now nationalized Fanny Mae and Freddy Mac.

Here is what the Obama Houseing Plan contains as explained by marketwatch.com:

"Allows 4 million –5 million homeowners to refinance via government-sponsored mortgage giants Fannie Mae and Freddie Mac.
Establishes $75 billion fund to reduce homeowners' monthly payments.
Develops uniform rules for loan modifications across the mortgage industry.

Bolsters Fannie and Freddie by buying more of their shares.
Allows Fannie and Freddie to hold $900 billion in mortgage-backed securities — a $50 billion increase" (Marketwatch.com).

Many are suggesting that the plan may help at least 9 million home owners,which is a good thing.

This housing plan completes the Obama economic recovery strategy. Here is that strategy 1) spend money to create jobs (the stimulus), 2) pour money into banks to make credit flow again, and 3) help people afford the homes they are buying.

The question we must ask, if we are to properly evaluate this strategy, is does it actually change the problems that go us into this mess? Or do we have here nothing but an effort to resuscitate and fundamentally and fatally flawed system, which at best only delays the inevitable?


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