CBNNews.com - President Obama vowed, Wednesday, to help homeowners who "played by the rules and acted responsibly," yet still fell victim to America's mortgage crisis.
Announcing his $75 billion foreclosure plan, Obama said the U.S. is facing "a crisis unlike any we've ever known," but that the aid would prevent "the worst consequences...from wreaking even greater havoc on the economy."
Like many American families, the Kinsales are watching their neighborhood deteriorate.
"The neighborhood is going down and down and down into a depression," Julien Kinsale said.
Who will benefit from Obama's foreclosure plan? Click play for insight from financial adviser, Robin Tull, following Jennifer Wishon's report. Also, read a summary of Obama's foreclosure plan here.
The family lives in Phoenix, Ariz.., one of the communities hardest hit by foreclosures.
Obama used the city as a backdrop to unveil details of his plan to keep homeowners out of foreclosure. He estimates the plan will impact more than 9 million homes.
"We must stem the spread of foreclosures and falling home values for all Americans and do everything we can to help responsible homeowners stay in their homes," Obama said Tuesday, during a signing ceremony for the stimulus deal passed by Congress last week.
The money for Obama's will come out of the $700 billion financial rescue plan passed last Fall called "TARP." The foreclosure program will have many options, including:
- Reducing mortgages by giving incentives to companies that cut interest rates;
- Allowing bankruptcy judges to modify mortgages for homeowners facing foreclosure.
Still, the wave of foreclosures is a complicated problem years in the making that won't be solved overnight.
"This isn't just too many people buying houses they couldn't afford," Economist Robert Mittlestaedt explained. "It was both builders building more houses that weren't necessarily needed and people buying houses above their means."
Another piece of the foreclosure puzzle is the president's $787 billion stimulus plan signed into law Tuesday.
Many Americans are hoping it will generate new jobs in their communities so they can get back to work and stop worrying about where their next mortgage payment is coming from.
Even Americans who can make payments are watching their home values plummet.
"I think people are worried how many houses around them are going to fall," homeowner Fred Balentine said.
For many families relief can't come soon enough, like Julien Kinsale's family.
"I've been frustrated, I've been angry, I've been sad. Right now, I'm just numb."