The U.S. Congress has passed the $787 billion economic recovery plan which is expected to include provisions to bailout banks to boost credit flow and reduce the number of foreclosed homes.
President Barack Obama has called Congress’ decision to pass the stimulus bill as a major milestone. In his weekly Internet and radio address, Obama described the development as just a start of efforts to turnaround the country’s economy.
He added that the problems that cause the country’s economic crisis are widespread and deep and the government’s response should commensurate with the task needed to address these problems which include the foreclosure crisis.
To succeed, Obama added, the recovery plan should include measures to bail out banks to boost credit flow and help homeowners avoid losing their homes to foreclosures.
Obama’s statements indicate that he plans to move forward immediately to the next phase of his recovery plan which is expected to include measures that will help distressed homeowners avoid foreclosures.
Obama, who is currently on a road tour to gather support for his recovery plan, is scheduled to sign the stimulus bill in Denver, Colorado.
Also, he plans to outline his economic recovery proposal to spend about $50 billion to reduce the number of distressed properties in Arizona in his speech in Phoenix. Arizona is among the states immensely affected by foreclosures.
Meanwhile, the Obama Administration is preparing for possible negative reactions to its foreclosure prevention plan, following the stock market’s unfavorable response to the financial bailout plan unveiled by Treasury Secretary Timothy F. Geithner.
The administration has not yet provided additional details on the housing portion of the recovery plan which fueled the decline of stock prices.
White House Press Secretary Robert Gibbs said that the success of the recovery plan should be gauged by the number of American homeowners who are protected from foreclosures.
On the other hand, Representative Barney Frank said that the plan to help distressed homeowners avoid losing their homes is designed to enable them to set aside 31 percent from their income for mortgage payment.
Frank said that he anticipated that the recovery plan will encourage mortgage lenders to write off the principal instead of the interest rate of the loan to help homeowners reduce their chances of default.
John Cutts has been educated in the finer points of the foreclosures market over 5 years. Learn how to invest in Foreclosures on ForeclosureHomesInvesting.com.
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