Obama Administration Extends Help to Jobless Homeowners

As reported in The Washington Post earlier today, the Obama administration is requiring lenders servicing FHA loans to allow unemployed homeowners to delay their monthly mortgage payment for up to 1 year, without the threat of foreclosure.

President Obama discussed the topic at a town hall event on Wednesday, where the question of housing and how his administration is going to handle the lack of recovery surfaced several times.

At the town hall event, the President admitted that his administration had not done enough/made missteps in the handling of the housing crisis.

I applaud the president for conceding that not enough has been done to this point and attempting a new strategy – or going “back to the drawing board” as he put it – was the way to go moving forward.

Further, I’m glad he’s making an effort to keep those who want to stay, in their homes. Nothing is worse for a street, block or neighborhood than vacant homes. Surrounding property values drop, crime increases and blight sets in.

However, it’s not enough. Principle reductions are the only real way to address the problem and begin the recovery. Well that, and lowering unemployment, but that’s another story.

Offering temporary assistance is a good step, but principle reductions will go much further towards a permanent solution…