Obama unveils mortgage plan to help California, 4 other states

Standing in the heart of the nation’s hard-hit foreclosure country, President Obama on Friday rolled out a $1.5-billion mortgage program meant for a handful of states, including California and Nevada, that have endured waves of home foreclosures during the recession.

The president also used the moment to give a needed boost to Senate Majority Leader Harry Reid’s reelection chances, crediting him with helping stave off a depression over the last year

Obama spoke to 1,800 people at a town hall-style event as part of a two-day Western swing in which he raised money for Democrats and campaigned for two senators facing tough campaigns: Reid and Michael Bennet of Colorado.

The announcement of new steps to prevent home foreclosures was aimed especially at Nevada, which has ranked first in foreclosures for 37 consecutive months. Although the administration has already put forward programs to reduce monthly mortgage payments, officials acknowledged that more relief is needed.

Under the new policy, $1.5 billion that had been reserved for the bank bailout will be rerouted to five states that have seen housing prices drop more than 20% since 2006: Nevada, California, Michigan, Florida and Arizona.

The money will go toward homeowners who have lost their jobs, owe more than their houses are worth or cannot afford to make monthly payments.

After announcing the program, Obama got a standing ovation.

“Government alone can’t solve this problem,” the president said. “And it shouldn’t. But government can make a difference. It can’t stop every foreclosure. . . . But what we can do is help families who have done everything right stay in their homes whenever possible.”

Polls indicate voters are unnerved by the economy and impatient with incumbents, and both Reid and the president seemed intent on showing they grasp the public mood.

Reid got straight to the point in introducing Obama. Speaking in hushed tones, he opened with: “Mr. President, people in Nevada are really hurting. We have people out of work, people that are afraid they’re going to lose their jobs.”

Nevada’s 13% unemployment rate is the nation’s second-highest, behind Michigan.

Obama portrayed Reid as a vital partner in passing recovery programs that averted an even worse economic downturn.

Like himself, he said, Reid has been scarred by the prolonged and bruising debate over healthcare. Obama said his political advisors warned him last year not to attempt a healthcare overhaul. He said he ultimately decided it was worth it, but that his advisors had a point.

“The people who were giving me advice at the beginning of the year were right,” Obama said. “Healthcare has been knocking me around pretty good. It’s been knocking Harry Reid around pretty good.”

Rescuing Reid won’t be easy. A January poll for the Las Vegas Review-Journal newspaper showed that more than half the voters surveyed disliked Reid.

Championing Obama’s call to revamp healthcare has hurt Reid at home, the survey showed. More than half the people polled said they opposed the plan, even though more than 450,000 state residents are uninsured.

Obama said Reid shared credit for the foreclosure plan unveiled Friday and other economic programs.

“I can personally attest that Harry Reid is one of the toughest people I know. He does not give up,” Obama said. “He knows what he cares about. He knows what he believes in, and he’s willing to fight for it.”

The president also sought to rally support for his healthcare overhaul. Next week he will meet with congressional leaders from both parties in a bid to revive the plan, which has been stalled in Congress.

Obama said he was open to Republican ideas, but he made it plain that he would arrive at the meeting with a plan reflecting Democratic priorities. That approach doesn’t sit well with Republicans, who say they would prefer to start from scratch.

“We’re going to move forward the Democratic proposal,” Obama said. “We hope the Republicans have one too. And we’ll sit down and let’s hammer it out. We’ll go section by section.”

He urged Americans to watch the session, which will be televised. “Pay attention to what this debate is about,” he said.

By visiting Nevada, the president also hoped to make amends for past statements suggesting that Las Vegas was a place budget-conscious Americans should avoid.

This month, Obama angered Nevada officials, Reid included, when he told a New Hampshire audience: “When times are tough, you tighten your belts. . . . You don’t blow a bunch of cash in Vegas when you’re trying to save for college.”

Las Vegas Mayor Oscar Goodman told reporters this week that he wouldn’t meet with Obama unless he stopped “derogatory” references to his city.

One man at the town hall meeting gave Obama a chance to patch things up. He introduced himself by saying he was from Arkansas. When the president asked why he was in town, the man replied, “Everybody comes to Vegas.”

Obama said: “That’s what I’m talking about! There you go. Everybody comes to Vegas! . . . Here’s my question: ‘Have you spent some money here in Vegas?’”

“Yes, sir,” the man said.

“That’s good. We like to see that,” Obama said.

Reinforcing the message, he spoke later in the day to the Las Vegas Chamber of Commerce and told the audience: “Before I go any further, let me set the record straight. I love Vegas! Always have.”