FORECLOSURE: crisis threatens millions of Americans with loss of their homes
PRESIDENT BARACK Obama has announced an ambitious $75 billion (€59 billion) plan to ease the housing crisis that threatens millions of Americans with the loss of their homes and has left more than one in four mortgage-holders owing more than their house is worth.
Mr Obama introduced the plan in Phoenix, Arizona, where home foreclosures have risen by more than 200 per cent in the past year.
“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 – a crisis which is unravelling home ownership, the middle class, and the American Dream itself,” he said.
The plan will help up to nine million home-owners refinance or restructure their mortgages to make monthly payments more affordable and to ensure that they can stay in their homes.
Tighter credit and falling property values have put 27 per cent of American mortgage-holders into negative equity and wiped out demand – construction of new homes hit its lowest level on record last month. Mr Obama said yesterday, however, that the bursting of America’s housing bubble was not just a financial misfortune but a moral lesson.
“Our housing crisis was born of eroding home values, but also of the erosion of our common values,” he said.
“It was brought about by big banks that traded in risky mortgages in return for profits that were literally too good to be true; by lenders who knowingly took advantage of homebuyers; by homebuyers who knowingly borrowed too much from lenders; by speculators who gambled on rising prices; and by leaders in our nation’s capital who failed to act amidst a deepening crisis.”
Mr Obama makes his first foreign trip as president today when a visit to Canada is expected to be dominated by talks about trade policy and the war in Afghanistan.
Canada’s parliament has voted to withdraw all Canadian troops from Afghanistan by 2011 but Mr Obama this week announced the deployment of an extra 17,000 US military personnel.
“I think Afghanistan is still winnable, in the sense of our ability to ensure that it is not a launching pad for attacks against North America,” the president told Canadian television.
“I think it’s still possible for us to stamp out al-Qaeda, to make sure that extremism is not expanding but rather is contracting. I think all those goals are still possible, but I think that as a consequence to the war on Iraq, we took our eye off the ball. We have not been as focused as we need to be on all the various steps that are needed in order to deal with Afghanistan.”
Mr Obama’s announcement about the extra troops came as a US general visited western Afghanistan to investigate allegations that six women and two children were killed in the latest US airstrike to claim civilian casualties.
US military commanders claimed that Monday’s attack in the Gozara district of Herat province killed 15 militants and targeted a leader named Ghulam Yahya Akbari.
A local police commander insisted, however, that most of the dead were women and children living in tents in the remote countryside. “If, during the course of investigation, it is discovered that any non-combatants were killed or injured in the strike we will take responsibility and make amends,” said Lieut Col Rick Helmer, a US military spokesman.
“However, it has been a past practice of the insurgents to surround themselves with women and children, knowingly placing them in danger.”
A United Nations report found this week that US, Nato and Afghan government forces killed 829 civilians last year, including 552 killed in air strikes.