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Obama pledges $75bn to fight repossessions
Paul Thompson in Miami19 Feb 2009
Barack Obama has thrown a $75billion (£53billion) lifeline to families faced with losing their home.
The president said the cash injection into the housing market was needed to tackle a "crisis unlike any we've ever known" and to stop it wreaking "even greater havoc".
Mr Obama claimed his plan would prevent up to nine million Americans having their homes repossessed. Speaking at a school outside Phoenix, Arizona, he said: "In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen.
"The American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighbourhoods."
Of the nearly 52 million US homeowners with a mortgage, about 13.8million owe more on their mortgage than their house is now worth, according to the latest figures.
The main aim of the Homeowner Affordability and Stability Plan is to lower mortgage payments for the three to four million people who are on the brink of losing their homes. Homeowners in negative equity will also be helped, although Obama said investors who had bought properties in the hope of making a quick profit would not benefit.
A further $200billion will be used to strengthen mortgage giants Freddie Mac and Fannie Mae. The lenders will have to change their rules so that homeowners with an 80 per cent or lower loan-to-value ratio can secure refinancing.
Mr Obama's first foreign trip as president was taking him to Canada today where he will meet prime minister Stephen Harper for the first time. The president, who will stay only about seven hours, will attempt to assuage concerns over US protectionism and will promise a new strategy in Afghanistan as Canada moves to withdraw all its 2,500 troops there. The leaders will also discuss clean-energy cooperation amid controversy over Canada's oil-rich sands. The US depends more on its northern neighbour for imported oil than it does on any other nation.
Meanwhile, a New York Post cartoon has been interpreted by some civil rights leaders as comparing Mr Obama to Travis the chimp, which was shot dead by police in Connecticut after mauling its owner's friend on Monday. The cartoon by Sean Delonas shows two officers standing over the body of a chimp. Its caption reads: "They'll have to find someone else to write the next stimulus Bill." The Rev Al Sharpton called the cartoon "troubling at best given the historic racist attacks of African-Americans as being synonymous with monkeys".
