President Obama Unveils New Housing Plan

By: CBS
By: CBS

President Obama bet on Las Vegas to demonstrate how he can help Americans in need of mortgage relief.

The president met with the Bonilla family at their kitchen table. They used federal funds to rehabilitate their house in a neighborhood with high foreclosures. It was the setting he chose to roll out a revamped home refinancing program.

It allows homeowners to refinance even if their home is underwater as long as they've paid their mortgage for six months.

"Say you have a $250,000 mortgage at a 6 percent interest rate, but the value of your home has fallen below $200,000," the President said. "Currently, you can't refinance. You're ineligible. That's about to change."

The president is going around Congress to enact the program with an executive order. He says he has no choice.

"I'm here to say that we can't wait for an increasingly dysfunctional Congress to do its job."

The new plan may only help an estimated one million homeowners, not millions of others like Ken LaLonde Fannie Mae or Freddie Mac don't hold his loan, which is part of the new program's requirements to refinance.

"I keep running into a roadblock of this might help others but it doesn't necessarily help me," LaLonde said.

The president chose Nevada to unveil the plan because the mortgage crisis hit the state hard. Home values have dropped by more than 50 percent in the last five years.

The plan will also allow existing second mortgages to become part of new loans held by major lenders.


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