Democrats are saying the President's plan and the launch on the
FHA Secure is not enough to help our country's housing crisis.
You can read the
full story here at MSNBC.
"We are talking about a tiny drop in the bucket and that is really inadequate," said Austan Goolsby, chief economic adviser to Barrack Obama, the Democratic presidential contender.
About 2m borrowers are behind on their loans and more than 3m could face foreclosure in the next two years, according to consumer groups.
Consumer advocates liken the pending economic impact on Americans to Hurricane Katrina in 2005.
"This is going to be like Katrina 10 times over," said Allen Fishbein, director of housing at the Consumer Federation of America, adding it was similar to the hurricane hitting 10 US cities.
About 300,000 Americans lost their homes when Hurricane Katrina devastated New Orleans.
But the Bush administration says the next step is for banks and mortgage lenders to voluntarily reach out to distressed customers and show flexibility in helping them refinance into lower-cost loans or offer a
loan modification.
But it is not clear that many of the private service companies that are contracted to supervise repayments of loans currently have the capacity, or incentive, to engineer relief for borrowers dispersed across the country.
"Non-profit organizations have an essential role to play if relief programms are to be effective," said Scott Syphax, chief executive of Nehemiah Corporation, the nation's largest privately-funded downpayment assistance program.
It's unclear exactly what the
FHA Secure Loan program will do to help ease the impending tsunami of foreclosures.
As I have stated from day 1, "The only way to "cure" our country's housing illness is through a massive loan modification campaign of all of these cancer ridden toxic mortgages!"