The federal government is committed to stimulating the sale of new homes and saving those at risk of foreclosure, President Obama told community development leaders in gathered at the White House Sunday.
The president was busy this weekend promoting his $390 billion home rescue plan, the Protecting, Revitalizing, Insulating, and Securing the American Dream Act, or PRISADA. Legislation will be introduced sometime this month during the lame-duck Congress.
“We want to save your home and we want to help you get a home if you don’t already have one,” Obama told members of ALMOND, a community leadership organization. “All Americans deserve to own their own home, and we will dedicate whatever resources necessary to make that happen.”
Home foreclosures have shown no sign of letting up. Following the mortgage meltdown, the industry plunged into a mortgage freeze, then a mortgage deep freeze, followed by a mortgage absolute zero cryogenic freeze.
PRISADA is creating excitement in some of the country’s hardest hit regions. As part of the plan, a newly created government corporation, Fruitee Mo, will join the already nationalized Fannie Mae and Freddie Mac to buy up bad mortgages while providing funds for new ones.
Fruitee Mo will essentially acquire an ownership stake in homes funded through its program in order to guarantee insulation from market forces. It will also partner with the Department of Housing and Urban Development to construct planned housing communities for new homeowners.
Some have criticized the ownership stake as going too far. “This will effectively nationalize every home in the country,” Sen. Jeff Sessions, R-Ala. said. Many Republicans, along with most Democrats, have pledged their support for the new program.
Obama defended his plan by noting the necessity of having the federal government protect mortgages.
“Together with HUD, Fruitee, Fannie and Freddie will stand side-by-side with the homeowner in realizing that great American dream of owning your own home,” Obama said, adding that by acquiring a stake in each home mortgage, the government will secure everyone’s ability to keep their home.
PRISADA would not only revitalize and secure new mortgages, but would also upgrade older neighborhoods and promote public safety. Using PRISADA as a crime-fighting tool was one way Democratic leaders have been able to win over huge segments of GOP support.
In particular, the new law would finance the construction of security gates and fences to make neighborhoods safer. This project would start with more dangerous neighborhoods and gradually move to encompass virtually every neighborhood in the country.
“The simple fact is that we all feel more secure in gated communities,” said HUD spokeswoman Taylor Richardson. “Everyone deserves this security that to this point has been a luxury only for the privileged few.”
The president called his mortgage relief plan an “overhaul” of the nation’s housing, stressing that drastic times call for drastic measures.
“This is a crisis. A fundamental, earth-shattering, sun-exploding, we’re-all-gonna-die crisis that threatens to engulf the planet in mass ruin unless serious action is taken right now at the federal level,” Obama said.
GOP leaders cautiously supported some aspects of PRISADA while acknowledging the huge price tag.
“We believe this plan can both relieve the battered housing market and make neighborhoods safer at a time of rising crime,” Rep. Meg Parsons, R-Mo., said in a statement. “We’re not 100% on the same page with the president but we agree with him that something has to be done, so we think Republican support will happen.”