Barack Obama, Housing Plan

OBAMA FOR USA. On March 4, 2009, the Obama administration began the most ambitious effort since the 1930s to help troubled homeowners, offering lenders and borrowers big incentives and subsidies to try to stem the wave of foreclosures. Administration officials estimated that the plan will help as many as four million people avoid foreclosure, at a cost to taxpayers of about $75 billion over the next several years.

The plan is bolder and more expensive than any of the Bush administration's programs, which were based almost entirely on coaxing lenders to voluntarily modify loans. While the number of loan modifications has climbed sharply, the number of foreclosures skyrocketed to 2.2 million at the end of 2008, a record.

In releasing detailed guidelines on the plan, first unveiled Feb. 17, the Treasury Department made it clear that the program would not help every homeowner in trouble. The plan would do little to help families whose income has evaporated because one or more breadwinners have lost their jobs, those swamped by big debts beyond their mortgages or for homeowners who are current on their loans but "upside down" -- owing more than their houses are worth.

In tandem with Mr. Obama's new housing plan, Congress is considering a measure that would allow bankruptcy judges to change mortgage terms to help homeowners avoid foreclosure, granting new authority some lawmakers say is central to easing the housing crisis. But by April it appeared that banks, working with Congressional Republicans and some Democrats, were on the verge of beating back the changes they most opposed, including the so-called "cram down" provision for bankruptcy that would change interests rates or reduce debts. The "cram down" provision died in the Senate in May.