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Obama To Unveil Foreclosure Solution

STEVE INSKEEP, host:

It's not surprise that President Obama picked Arizona to announce his $50 billion plan to help homeowners. The state has one of the highest foreclosure rates in the nation. And when the president speaks in the Phoenix suburb of Mesa later today, many Arizona residents will listen closely, as NPR's Ted Robbins found out.

TED ROBBINS: If the president wants to reach the people dealing with the foreclosure crisis up close, he could come to the Tucson community food bank and walk upstairs to the regular Tuesday night workshop held by a local nonprofit counseling agency.

Ms. YESINIA LOPEZ(ph) (Counselor): What is a budget? It's an itemized summary of expenses and income for a given period of time.

ROBBINS: Yesinia Lopez talks about cutting expenses to pay the mortgages while a dozen homeowners - English and Spanish speakers - sit around tables eating snacks to hold them over 'til dinner. These folks don't want to join the 117,000 Arizona property owners who got foreclosures notices last year. But to save them, workshop leader Daniel Mendez says counselors like him need more effective tools.

Mr. DANIEL MENDEZ (Workshop Leader): We've been given this task to help homeowners and we were kind of asked, like, to help the sinking ship. And here's your boat but there's no paddles.

ROBBINS: First, Mendez says he wants President Obama to fix the current government program to help homeowners restructure mortgages. It's voluntary and lenders aren't using it.

Mr. MENDEZ: So, I'm hoping that the Treasury, the Fed and the president will put more pressure on lenders to actually participate in that program.

ROBBINS: If lenders won't cooperate, Mendez hopes President Obama gives bankruptcy judges the authority to restructure mortgages.

Mr. MENDEZ: But if you recall, bankruptcy laws were only changed in '05. So prior to that, you could file for bankruptcy and get your loan modified.

ROBBINS: Both ideas have been kicked around Washington and are expected to be part of the president's plan. For Cheryl Russ(ph), a homeowner at the workshop, it's all about communication. She says her adjustable rate interest-only mortgage is now worth more than her house. She's been trying to get her lender, Countrywide, to refinance since December.

Ms. CHERYL RUSS (Homeowner): I told them, I'm not going to be able to make my payment in February. I know this now. And they still won't talk to me. They are not required to talk to us until we are at least two payments behind.

ROBBINS: Cheryl Russ works as an insurance agent; her husband is a truck driver when he can find work. She wants her lender to recognize she's trying to the right thing.

Ms. RUSS: Tell them they have to talk to me before I go into default. I don't want to go into default.

ROBBINS: She says she and her husband were told their initial low interest rate wouldn't reset for five years. Instead, it reset after five months. So, the final thing they and the counselors here hope the president announces is that he'll outlaw the kind of loans that got homeowners and lenders into this mess.

Ted Robbins, NPR News, Tucson. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Ted Robbins
As supervising editor for Arts and Culture at NPR based at NPR West in Culver City, Ted Robbins plans coverage across NPR shows and online, focusing on TV at a time when there's never been so much content. He thinks "arts and culture" encompasses a lot of human creativity — from traditional museum offerings to popular culture, and out-of-the-way people and events.
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