Obama’s Foreclosure Moratoriam Campaign Promise

Between rising foreclosures and falling home prices, housing issues became a huge concern in the months leading up to the election. As such, they’re likely to continue to take priority during President-elect Barack Obama’s first term.

"This is really an unprecedented crisis we’re in," said Peter Tatian, senior research associate for the Urban Institute, referring to the foreclosure problem and its ripples through Wall Street. "People are still trying to figure out what the size and the nature of the problem is, and how to intervene to solve things."

A full slate of complex housing woes needs to be addressed, from the restructuring of mortgage giants Fannie Mae and Freddie Mac to the modernization of the Real Estate Settlement and Procedures Act, which governs home sales.

But foreclosures are likely the No. 1 concern, because that problem is a big one.

According to a report from Credit Suisse, 6.5 million loans were expected to fall into foreclosure over the next five years. That’s based on home prices dropping 10% in 2008 and 5% in 2009, before rising 3% in future years.

The Center for Responsible Lending estimated in August that nearly 2.2 million foreclosures would occur due to defaults on subprime loans from late 2008 through the end of 2009. More than 40 million homes in neighborhoods surrounding those foreclosures would suffer price declines as a result, causing a $352 billion total decline in property values, or an average $8,667 per home.

Federal and mortgage industry efforts are already underway, with various degrees of success, and will continue to evolve before Obama takes office.

On the campaign trail, Obama proposed a three-month moratorium on foreclosures for banks or lenders getting money from the $700 billion federal rescue plan — if the customer is making a good-faith effort to make payments and renegotiate the mortgage.

What do you think, realistically? Will Obama be successful in getting a three-month moratorium on foreclosures passed, or will that promise fall into the "Campaign Rhetoric Garbage Can"? We’d love to hear your opinion. Just click the comment link below and tell us what you think.