HERE'S THE HOUSING PLAN

Geithner is pretty clear in the USA Today opinion piece. In the comments, a lot of people are pounding on their chests and asking why these people should be helped when they were responsible. It seems that out of spite, they would prefer to see America tumble into another Great Depression. I'm certainly in favor of holding people responsible but I think we need to start with the mortgage industry, including the MOTU on Wall Street, before coming down hard on home owners.

Housing plan's aim: Help people help themselves
By Timothy Geithner and Shaun Donovan

The plan has two major components. First, it will aid responsible homeowners by reopening the door for refinancing. It will make sure that homeowners who've been making their payments but have still seen their house values plunge can nevertheless refinance into fixed-rate mortgages guaranteed by government-chartered Fannie Mae and Freddie Mac.

We estimate that 4 million to 5 million homeowners will have the opportunity to benefit from this program, and that the average participant could save thousands of dollars a year.

Second, the plan will also help prevent avoidable foreclosures by reducing eligible families' monthly mortgage payments to the 31% of income that most experts consider affordable. It will do so by requiring lenders to first cut the payments of imperiled homeowners from, in some cases, 50% or more of these homeowners' income to 38%. Lenders and the government will then split the cost of cutting the payments still further to reach the 31% mark.

We estimate that 3 million to 4 million homeowners at risk of foreclosure will be eligible for the help they need to stay in their homes, and that millions more will benefit by avoiding the fallout from foreclosures in their neighborhoods.

Separately, we will help protect low mortgage rates for all Americans by doubling to $200 billion each our commitments to Fannie and Freddie.