US President Barack Obama has pledged 220 billion euros to stem the wave of home foreclosures that sparked financial meltdown in the US.
Unveiling the latest phase of his effort to lift the country out of recession he said: “Through this plan we will help between seven and nine million families restructure, or refinance their mortgages so they can avoid foreclosure.” He was quick to stress he was not coming to the aid of dishonest lenders. “But I also want to make it clear about what this plan will not do,” he said. “It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans.” The announcement follows the signing of a landmark 620 billion euro economic stimulus package. US Treasury Secretary Timothy Geithner said he expects the plan to quickly help the housing market and that it would “bolster the drive to restore the financial systen to good health”. Sixty billion euros will subsidise homeowners struggling to pay their mortgages. Mortgage companies like Fannie Mae and Freddie Mac can now invest eighty billion euros to mop up more home loans and spur fresh lending. And Washington will be able to inject a further 80 billion into each of the mortgage giants protecting them against losses as they expand their massive reach into the housing market.