Bank bailout funds to go to housing

TEXT OF STORY

Steve Chiotakis: In a few hours in Las Vegas, President Obama will announce a new federal assistance program. It's going to help homeowners in states hit hardest by the housing crisis. Nevada, California, Florida, Michigan, Arizona. Marketplace's Jeremy Hobson has more.


Jeremy Hobson: The president will use $1.5 billion from the $700 billion bank bailout fund. The money will go to state housing finance agencies, and will likely be used to pay for mediation programs for homeowners who are underwater on their mortgages or to help the unemployed stay in their homes.

Andrew Jakobovics is a housing market expert at the Center for American Progress. He says $1.5 billion may not sound like a lot when you consider the size of the U.S. housing market, but:

Andrew Jakobovics: There is still a huge potential number of properties that might come into foreclosure that would really risk the nascent housing recovery, and I think that's where they're focusing.

The president will make the announcement at a campaign event for Senate Majority Leader Harry Reid, who is facing a tough re-election race this year in Nevada -- a state where 65 percent of homeowners are underwater on their mortgages.

I'm Jeremy Hobson for Marketplace.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.

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