Nearly 11 million Americans, or more than a fifth of homeowners, are buried in debt, owing more than their properties are worth after piling their life savings into their properties — a persistent and largely unaddressed problem that represents the missing link in what many economists consider is President Obama administration’s overall strong response to the recession.
“Housing was the neglected piece. They (Obama administration) have the kind of attitude that they don’t believe this is a good value for the money, this is politically unpopular, and there’s not much we can do,” said Alan Blinder, a former Federal Reserve vice chairman consulted frequently by the White House. “There were obvious things to do that academics and others started pointing out back in 2008. That could have shortened the recovery time.”
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But although the new Obama administration had hundreds of billions of dollars in unspent financial bailout money available to use, it decided against any significant program to reduce the debt of underwater homeowners.
