Obama Announces Foreclosure Rescue For 5 States

Unveiling a plan to rescue homeowners in five states stung by high foreclosure rates, President Obama told a crowd in hard-hit Nevada Friday that he will pump $1.5 billion into state and local housing agencies to help Americans stay in their homes.

The plan addresses Nevada, California, Arizona, Michigan and Florida, where home values have fallen more than 20 percent from peak. Obama said federal funds will be channeled to state housing agencies, which can use them for a variety of purposes, such as modifying loans in cases where homes are worth less than their mortgages; buying up foreclosed homes; and enabling unemployed homeowners to avoid foreclosure.

"What we can do is help homeowners who did everything right stay in their homes," Obama said, addressing 1,800 people in the Las Vegas suburb of Henderson. "During these difficult economic times, we will work to help responsible homeowners stay in their homes and stabilize the housing market so home values can rise."

Nevada's high foreclosure rate is accompanied by the nation's second-highest unemployment rate: 13 percent.

Seizing an opportunity to show support for Senate Majority Leader Harry Reid — who faces a tough re-election battle in November — Obama said the Nevada lawmaker has backed initiatives to lower monthly mortgage payments for more than 1 million homeowners through loan modifications.

He also said Reid was a leader in coming up with the $1.5 billion plan for housing finance agencies and other administration programs from health care to economic recovery and bank regulation.

"He knows what he cares about; he knows what he believes in and he's willing to fight for," Obama said of Reid, who introduced the president and sat behind him at the event.

With the visit to Henderson, the president was wrapping up a two-day swing to the West. On Thursday, Obama spoke at a series of fundraisers for Senate Democrats who are seen as particularly vulnerable to defeat in the upcoming elections.

Winning Colorado and Nevada in the 2008 presidential race was a key part of Obama's strategy for redrawing the nation's political map. But White House spokesman Robert Gibbs reminded reporters on Air Force One Thursday that Democratic candidates aren't guaranteed wins in either Colorado or Nevada.

"In a presidential year, they're very competitive states, as they were just two years ago," Gibbs said. "I think the political landscape — not just in these two states, but throughout the country — continues to be dominated by concerns about the economy, not surprisingly."

While Friday's speech was billed as a forum for announcing the new housing program, Obama also used the appearance at Henderson's Green Valley High School to push the administration's health care program.

"We can't prosper if we've got a broken-down health care system that works better for the insurance companies than it does for ordinary Americans," he told the crowd. "And we can't squander the opportunity to reform our health care system to make it work for everybody."

Obama is set to host a bipartisan health summit next week. He said he's waiting for Republicans to give him a proposal for dealing with the rising cost of medical care and the high number of uninsured Americans.

With additional reporting by NPR's Scott Horsley

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