Obama says "back to the drawing board" on mortgage help
President Obama said today that his administration is "going back to the drawing board" for ways to help homeowners struggling in the poor housing market.
Responding to a question on assistance for homeowners during his "Twitter town hall," the president said the programs set up under his watch have probably led to several million home mortgage modifications, either because the federal government had direct control of the loan process or the private sector followed suit.
"But it's not enough," he continued. His administration, he said, is working with banks "to see if they can modify the loans so payments are lower and in some cases even modify [a homeowner's] principal."
A recent CBS News poll showed that more than half of Americans, 53 percent, say the federal government should provide help to people who are having trouble paying their mortgages. As many as 22 percent of homeowners now have "underwater" mortgages - that is, they owe more than their home is worth.
Mr. Obama said during Wednesday's virtual town hall that his initial response to the housing crisis was one of the two mistakes he made in responding to the recession.
The administration's marquee program, the Home Affordable Modification Program, which aims to help struggling borrowers avoid foreclosure, has been criticized from both the political left and right as a failure.
Mr. Obama said today that improvement in the housing market will depend largely on the improvement of the overall economy.
"No federal program is going to be able to solve the housing problem" entirely, he said. "Most of this is going to be free market."
"The one thing we can do for homeowners who have been responsible," the president continued, is to "try to match them up with bankers so that each side ends up winning."
One of the challenges, Mr. Obama said, is "sorting through who owns what" given that loans were "sliced and diced" into mortgage-backed securities.
Still, he said, "The bottom line is we should be able to make some progress on helping some people."
More from the Twitter town hall:
Obama warns of "second recession or worse"
Obama addresses Tweet to end "war on drugs"
Obama says he didn't realize magnitude of recession at first
Obama: Time to for NASA to "revamp" space mission
