Obama Loan Mod Plan Not Meant to Work in a Vacuum

Although the causes of the current economic crisis are complex, few can doubt that the skyrocketing rate of mort- gage loan defaults and foreclosures of the past few years were the catalyst, with the resulting drop in housing values serving to exacerbate these problems. The Obama administration recently announced the details of its "Making Home Affordable Program," which is designed to help up to 9 million families either refinance their existing mortgage or modify their current loan, all in an effort to reduce payments and curtail fu- ture foreclosures. The broad parameters of the program were announced on Feb. 18 and additional guidance was issued on March 4. The goal of this new program is to stabilize and eventually strengthen housing prices. This is critical for eco- nomic recovery. Yet, the program is not intended to work in a vacuum. The new stimulus law and proposed budget, along with the overall Financial Stability Plan, which includes the reconstituted TARP Program and the various other credit and liquidity initiatives from the Fed, are all designed to work together to lift this country out of what many believe will be the deepest recession since the Great Depression.