奥巴马每日发言on the mortgage crisis(2009-02-18)

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REMARKS BY THE PRESIDENT ON THE HOME MORTGAGE CRISIS
Dobson High School
Mesa, Arizona
10:25 A.M. MST

THE PRESIDENT:  Thank you very much.  (Applause.)  Please, everybody have a seat.  Thank you.  Well, it is good to be back in Arizona.  (Applause.)  Thank you.  Are you excited?  (Applause.)  Thank you, thank you.  And thank you for arranging for such a beautiful day.  I want to stick around, but I got to go back to work.  But it is wonderful to be here.  And to all of you, I know that attending these kinds of events, oftentimes you have to wait in line and there's all kinds of stuff going on.  But I appreciate you being here very much.  And to all the officials here at the school, the principal and the student body, everybody who helped make this possible, thank you so much to all of you.  (Applause.)  

     I'm here today to talk about a crisis unlike we've ever known -- but one that you know very well here in Mesa, and throughout the Valley.  In Phoenix 1 and its surrounding suburbs, 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 neighborhoods.  It's a crisis that strikes at the heart of the middle class:  the homes in which we invest our savings 2 and build our lives, raise our families and plant roots in our communities.

     So many Americans have shared with me their personal experiences of this crisis.  Many have written letters or emails or shared their stories with me at rallies and along rope lines. Their hardship and heartbreak are a reminder 3 that while this crisis is vast, it begins just one house -- and one family -- at a time.

     It begins with a young family -- maybe in Mesa, or Glendale, or Tempe -- or just as likely in a suburban 4 area of Las Vegas, or Cleveland, or Miami.  They save up.  They search.  They choose a home that feels like the perfect place to start a life.  They secure a fixed-rate mortgage at a reasonable rate, and they make a down payment, and they make their mortgage payments each month.  They are as responsible as anyone could ask them to be.

     But then they learn that acting 5 responsibly often isn't enough to escape this crisis.  Perhaps somebody loses a job in the latest round of layoffs 6, one of more than 3.5 million jobs lost since this recession began -- or maybe a child gets sick, or a spouse 7 has his or her hours cut.

     In the past, if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable 8 payments, or you could have refinanced your home at a lower rate.  But today, home values have fallen so sharply that even if you make a large down payment, the current value of your mortgage may still be higher than the current value of your house.  So no bank will return your calls, and no sale will return your investment.

     You can't afford to leave, you can't afford to stay.  So you start cutting back on luxuries.  Then you start cutting back on necessities.  You spend down your savings to keep up with your payments.  Then you open the retirement 9 fund.  Then you use the credit cards.  And when you've gone through everything you have, and done everything you can, you have no choice but to default on your loan.  And so your home joins the nearly 6 million others in foreclosure or at risk of foreclosure across the country, including roughly 150,000 right here in Arizona.

     But the foreclosures which are uprooting 10 families and upending lives across America are only part of the housing crisis.  For while there are millions of families who face foreclosure, there are millions more who are in no danger of losing their homes, but who have still seen their dreams endangered.  They're the families who see the "For Sale" signs lining 11 the streets; who see neighbors leave, and homes standing 12 vacant, and lawns slowly turning brown.  They see their own homes -- their single largest asset -- plummeting 13 in value.  One study in Chicago found that a foreclosed home reduces the price of nearby homes by as much as 9 percent.  Home prices in cities across the country have fallen by more than 25 percent since 2006.  And in Phoenix, they've fallen by 43 percent.

     Even if your neighborhood hasn't been hit by foreclosures, you're likely feeling the effects of this crisis in other ways. Companies in your community that depend on the housing market -- construction companies and home furnishing stores and painters and landscapers -- they're all cutting back and laying people off.  The number of residential 14 construction jobs has fallen by more than a quarter million since mid-2006.  As businesses lose revenue and people lose income, the tax base shrinks, which means less money for schools and police and fire departments.  And on top of this, the costs to local government associated with a single foreclosure can be as high as $20,000.

     So the effects of this crisis have also reverberated 15 across the financial markets.  When the housing market collapsed 17, so did the availability of credit on which our economy depends.  And as that credit has dried up, it's been harder for families to find affordable loans to purchase a car or pay tuition, and harder for businesses to secure the capital they need to expand and create jobs.

     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 continue to deepen -- a crisis which is unraveling home ownership, the middle class, and the American Dream itself.  But if we act boldly and swiftly to arrest this downward spiral, then every American will benefit.  And that's what I want to talk about today.

     The plan I'm announcing focuses on rescuing families who've played by the rules and acted responsibly, by refinancing loans for millions of families in traditional mortgages who are underwater or close to it, by modifying loans for families stuck in sub-prime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune, and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments.

     At the same time, this plan must be viewed in a larger context.  A lost home often begins with a lost job.  Many businesses have laid off workers for a lack of revenue and available capital.  Credit has become scarce as markets have been overwhelmed by the collapse 16 of security backed -- securities backed by failing mortgages.  In the end, the home mortgage crisis, the financial crisis, and this broader economic crisis are all interconnected, and we can't successfully address any one of them without addressing them all.

     So yesterday, in Denver, I signed into law the American Recovery and Reinvestment Act, which will create or save -- (applause.)  The act will create or save 3.5 million jobs over the next two years -- including 70,000 right here in Arizona, right here -- (applause) -- doing the work America needs done.  And we're also going to work to stabilize 18, repair and reform our financial system to get credit flowing again to families and businesses.

     And we will pursue the housing plan I'm outlining today.  And through this plan, we will help between 7 and 9 million families restructure or refinance their mortgages so they can afford -- avoid foreclosure.  And we're not just helping 19 homeowners at risk of falling over the edge; we're preventing their neighbors from being pulled over that edge, too -- as defaults and foreclosures contribute to sinking home values, and failing local businesses, and lost jobs.

     But I want to be very clear about what this plan will not do:  It will not rescue the unscrupulous or irresponsible by throwing good taxpayer 20 money after bad loans.  It will not help speculators -- (applause) -- it will not help speculators who took risky 21 bets on a rising market and bought homes not to live in but to sell.  (Applause.)  It will not help dishonest lenders who acted irresponsibly, distorting the facts -- (applause)  -- distorting the facts and dismissing the fine print at the expense of buyers who didn't know better.  And it will not reward folks who bought homes they knew from the beginning they would never be able to afford.  (Applause.)  So I just want to make this clear:  This plan will not save every home.