this
ON A MORNING IN FEBRUARY, less than a month
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into his presidency, Barack Obama walked onto a stage at a
gym in Dobson High School in Mesa, Arizona, prepared to talk
about the wave of home foreclosures wrecking neighborhoods
across the county. ¶ The plan Obama sketched out on Feb.
18, 2009, suggested a new use for taxpayer money: to pay
mortgage companies to restructure those home loans held by
struggling families. Together with a refinancing program, the
plan would prevent “the worst consequences of said
crisis from wreaking even greater
havoc on the economy,” the new
president said.
Georgina Solis, a teacher’s
aide at the school, listened
closely as she watched the
speech on a TV in a classroom.
Her husband had recently lost
his job as a maintenance worker,
and the family had fallen behind
on their mortgage payments.
“I gave my vote to Obama because he’s a new hope,” Solis said
in an interview at the time with
the Arizona Republic. “I hope I’ll
be able to keep my home because
of his policy.”
But the clear path to recovery
Obama described never materi-
alized outside that Arizona gym.
The president said that the programs he announced would help
between 7 and 9 million families
lower their payments and avoid
foreclosure. As of the end of June,
just 2.3 million had gotten assistance. That was just the beginning of the plan’s shortcomings.
Many of those whose loans were
modified, like Solis, now say they
feel stuck. Their monthly payments went down, but they are
still underwater, meaning they owe
the bank more than their home is
worth. They can’t sell, and so they
must deal with a cruel irony each
month: paying an inflated mortgage
on an investment sold to them as
the soundest financial decision they
could make, a must-have for anyone
who wants to join the middle class.