Obama administration bolsters homeowner lifeline

A realtor and bank-owned sign is displayed near a house for sale in Phoenix, Arizona, January 4, 2011.

Credit: Reuters/Joshua Lott

By Margaret Chadbourn

WASHINGTON (Reuters) - The Obama administration, in an election-year bid to help distressed homeowners, on Friday expanded its main foreclosure prevention program, and pushed for Fannie Mae and Freddie Mac to forgive mortgage debt.

The administration said it would extend the life of the Home Affordable Mortgage Program by a year through 2013 and widen it to reach more heavily indebted homeowners.

It also said it would provide incentives to encourage Fannie Mae and Freddie Mac, the government-controlled mortgage finance providers, to write down loans, an idea which their regulator has worried would unnecessarily add to the cost of taxpayer bailouts for the two firms.

The regulator, the Federal Housing Finance Agency, withheld final judgment on the proposal, saying it would study it further.

Fannie Mae and Freddie Mac own or guarantee about half of all U.S. home loans, and their participation in principal reduction under HAMP could greatly expand the reach of the $29.9 billion program.

Nearly 11 million Americans are underwater on their mortgages - meaning they owe more than their homes are worth. With some key electoral swing states among the hardest hit by the housing crisis, the sector's health could become an important factor in November's elections.

President Barack Obama made clear in his State of the Union address on Tuesday that he would continue to press for aggressive action to help homeowners, and Friday's announcement was just the first of several on housing initiatives that are expected in coming weeks.

Republicans in the U.S. House of Representatives last year sought to shut down HAMP, arguing it was ineffective, but the bill died in the Democratic-led Senate.

The HAMP program, which draws from the Treasury Department's financial bailout fund, pays mortgage servicers to rewrite loan terms to reduce monthly payments.

When the administration launched the program in 2009, it expected as many as 4 million loans would be modified. So far, only about 900,000 households have permanently won new loan terms.

As of the end of last year, only about $3 billion had been spent of the $29 billion set aside for HAMP.

EXPANDING ITS REACH

As part of its effort to reach more Americans, both the Treasury Department and the Department of Housing and Urban Development said they would seek to aid homeowners pinched by other types of debt, including credit cards and medical bills.

In addition, the administration said it was tripling the incentives paid to investors when they reduce loan balances. Investors who rent out properties would also be able to access mortgage aid under the revamped program.

FHFA's acting director, Edward DeMarco, has argued that Fannie Mae and Freddie Mac could provide equal relief to homeowners through loan forbearance at less cost to taxpayers than slashing mortgage debt.

Treasury has notified the FHFA that it "will pay principal reduction incentives to Fannie Mae or Freddie Mac if they allow servicers to forgive principal in conjunction with a HAMP modification," Treasury Assistant Secretary Timothy Massad said.

By offering taxpayer money to cover the costs of write-downs at Fannie Mae and Freddie Mac, the Obama administration is seeking to overcome DeMarco's objections.

"DeMarco said he is willing to reconsider principal reduction for mortgages backed by Fannie and Freddie, if, in his words, 'a source of funds outside the enterprises emerge to cover some portion of the costs associated with reducing principal,'" Senator Jack Reed, a member of the Senate Banking, Housing & Urban Affairs Committee, said in a statement.

"The administration has now made those funds available," Reed, a Rhode Island Democrat, said. "I expect FHFA to promptly reconsider their analysis and help more Americans avoid foreclosures."

Reed has been urging the administration to tap HAMP for principal reductions on loans backed by Fannie Mae and Freddie Mac.

The administration did not specify how much it would pay Fannie and Freddie to participate in HAMP.

(Reporting By Margaret Chadbourn; Editing by Andrea Ricci, Tim Ahmann, Andrew Hay, Leslie Adler)

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Obama thanks military, volunteers on Thanksgiving

President Barack Obama makes Thanksgiving Day calls for U.S. military personnel from Oval Office 24 November 2011.

IMG credit: Reuters/Pete Souza-the White House/handout

WASHINGTON | Thu 24th November 2011 1: 28 pm EST

WASHINGTON (Reuters) - President Barack Obama said Thursday, voluntary was grateful to military service members and soup kitchen the United States equally and American unit despite Washington's political deadlock holiday.

In his speech of the radio Obama wished Americans a happy Thanksgiving and said that the holiday a national community was.

"We are particularly grateful for the Americans to defend our country from abroad." The service members eat Thanksgiving away from your families, that American people are thinking of you today, "said he."

"We are also grateful for the Americans, the time out of their holiday serve in soup kitchens and shelters make sure that their neighbours take a hot meal and a place to stay."

Obama said that political partisanship and gridlock in Washington made it easy to questions whether U.S. Unit was possible.

"But what is happening in this moment think." "Americans thankfully come together from all walks of life as a people, for the blessings of family, community and country," he said.

Obama 10 soldiers in the Iraq and Afghanistan provided on Thursday, wish a happy them and their families Thanksgiving and thank them for their victim telephoned, said the White House.

The White House said that Obama with two soldiers from the army, air force, Coast Guard, Marines and Navy said.

Obama planned a quiet Thanksgiving with friends, family and staff at the White House.

The White House said was Obama's Thanksgiving dinner menu:

Turkey

Ham

Cornbread Stuffing

Oyster stuffing

Green

Macaroni and cheese

Sweet potatoes

Mashed potatoes

Green Bean Casserole

Dinner rolls

Dessert:

Banana cream pie

Pumpkin pie

Apple Pie

Sweet potato pie

Huckleberry pie

Cherry pie

(Writing by Ian Simpson;) (Editing by Barbara Goldberg)

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Obama boosts U.S. military in Australia, reassures China

AppId is over the quota AppId is over the quota 

President Barack Obama signs a guest book after participating in an arrival ceremony with Australia's Prime Minister Julia Gillard at Parliament House in Canberra, Australia, November 16, 2011.

Credit: Reuters/Jason Reed

By Caren Bohan and James Grubel

CANBERRA | Wed Nov 16, 2011 8:01am EST

CANBERRA (Reuters) - President Barack Obama and Australian Prime Minister Julia Gillard on Wednesday unveiled plans to deepen the U.S. military presence in the Asia-Pacific, with 2,500 U.S. marines operating out of a de facto base in northern Australia.

China, already worried the United States is caging it in, immediately questioned whether strengthening military alliances would help the region when economic woes put a premium on cooperation.

"With my visit to the region, I am making it clear that the United States is stepping up its commitment to the entire Asia-Pacific region," Obama told a joint news conference with Gillard in Canberra.

From next year, U.S. troops and aircraft will operate out of the tropical city of Darwin, only 820 kms (500 miles) from Indonesia, able to respond quickly to any humanitarian and security issues in Southeast Asia, where disputes over sovereignty of the South China Sea are causing rising tensions.

"It is appropriate for us to make sure...that the security architecture for the region is updated for the 21st century and this initiative is going to allow us to do that," Obama said.

He stressed that it was not an attempt to isolate China which is concerned that Washington is trying to encircle it with bases in Japan and South Korea and now troops in Australia.

"The notion that we fear China is mistaken. The notion that we are looking to exclude China is mistaken," he said, adding China was not being excluded from the planned Transpacific Partnership (TTP) on trade.

"We welcome a rising, peaceful China."

But China's rising power means it must take on greater responsibilities to ensure free trade and security in the region, he added.

"It's important for them to play by the rules of the road and, in fact, help underwrite the rules that have allowed so much remarkable economic progress," he said.

PEARL HARBOUR OF AUSTRALIA

The U.S. deployment to Australia, the largest since World War Two, will start next year with a company of 200-250 marines in Darwin, the "Pearl Harbour of Australia," Gillard said.

More bombs were dropped on Darwin during a surprise Japanese raid than on Pearl Harbour, Hawaii.

A total of 2,500 U.S. troops would eventually rotate through the port city. The United States will bring in ships, aircraft and vehicles, as well as increase military training.

Asked about the proposed deepening of U.S.-Australian military cooperation, Foreign Ministry spokesman Liu Weimin said China stood for "peaceful development and cooperation."

"We also believe that the external policies of countries in the region should develop along these lines," Liu told a regular news briefing in Beijing.

Liu added that "whether strengthening and expanding a military alliance is in the common interests of the region's countries and the international community is worthy of discussion," especially amid a gloomy international economic situation and with each country seeking cooperation.

But some Asian nations are likely to welcome the U.S. move as a counterbalance to China's growing military power, especially its expanding maritime operations, and a reassurance that Washington will not scale back its engagement in the region due to a stretched U.S. military budget.

"The United States hopes to militarily strengthen alliance relations with Japan in the north and with Australia in the south, with the clear intention of counter-balancing China," Su Hao, the director of the Asia-Pacific Researcher Center at the Foreign Affairs University in Beijing, told the Global Times, a popular Chinese newspaper.

OBAMA TO RAISE SOUTH CHINA SEA

The winding down of wars in Afghanistan and Iraq has opened the door to greater U.S. attention to simmering tension over the South China Sea, a shipping lane for more than $5 trillion in annual trade that the United States wants to keep open.

Obama plans to raise maritime security in the South China Sea at a regional summit on Bali this week, defying China's desire to keep the sensitive topic off the agenda.

China claims the entire maritime region, a vital commercial shipping route rich in oil, minerals and fishery resources. It insists that any disputes be resolved through bilateral talks and says Washington has no business getting involved.

"The United States is also trying to get involved in a number of regional maritime disputes, some of which concern China's sovereignty and territorial integrity," a commentary from China's official Xinhua news agency said.

Vietnam, the Philippines, Taiwan, Malaysia and Brunei hold rivals claims to at least parts of the sea and tension occasionally flares up into maritime stand-offs.

Obama will make an "anchor speech" outlining the U.S. vision for the Asia-Pacific to the Australian parliament on Thursday before a whistle stop in Darwin. He then flies to the Indonesian island of Bali for the East Asia summit.

(Additional reporting by Michael Perry and Jim Regan in Sydney and Chris Buckley in Beijing; Editing by Lincoln Feast and Jonathan Thatcher)

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