Starts at the the minute 21:00 mark.


THE PRESIDENT:  Appreciate you, sir.  (Applause.)  Young lady right back there with the glasses on.  There she is.

Q    Welcome, Mr. President, to Henry County.  My name is Luanne Levine (ph), and I own a local real estate company here in Henry County, over in Geneseo.  So you know we’re I’m headed:   housing.  Every week I sit around the kitchen table of families that are here today and I listen to the stories of a lost job, upside down in their house.  And they ask, Luanne, how can you help?  What programs are out there?

I have to say I saw a turnaround come May and June.  My phone was ringing.  I was busier than all get-out.  I could see that the country — yes, we are in rehab.  People have made adjustments and I saw progress.

Since the debt ceiling fiasco in Washington, the phones have stopped.  We have no consumer confidence after what has just happened.  Interest rates are a record low.  I should be out working 14 hours a day, and I am not.  What are your future plans in helping middle-class America — Generation X and Y and middle-class America will get the country out of where we are, and I want to know what are your contingent plans?

THE PRESIDENT:  Well, first of all, you’re absolutely right that housing has been at the key — at the core of a lot of the hardships we’ve been going through over the last two and a half years.  And that’s why we’ve made it such a priority to try to help families stay in their homes the last two and a half years.  And that’s why we’ve made it such a priority to try to help families stay in their homes if they can still afford the home.  There were some folks who couldn’t — who bought homes they couldn’t afford, but there were a lot of folks who just had a run of bad luck because somebody lost a job or lost a shift.  And so what we’ve been trying to do is push the banks, push the servicers to do loan modifications that will allow people to stay in their homes and will try to buck up housing prices generally.

Q    Can I — Can I please say —

THE PRESIDENT:  Sure, go ahead.

Q    — the loan modification system has been a nightmare.  Short sales are a nightmare.  And the lenders are so tight and you have to be so perfect, and it’s not a perfect world.

THE PRESIDENT:  Well, what we’ve been trying to do is make sure that — we’ve probably had a couple of million loan modifications that have been taking place.  The problem is, is that the housing market is so big.  And so a lot of families have just had to work down their debts, and they’ve been successful — and as you said, we were starting to see things bottom out and confidence start picking up.

Now, I can’t excuse the self-inflicted wound that was that whole debt debate.  It shouldn’t have happened the way it did.  We shouldn’t have gotten that close to the brink.  It was inexcusable.  But moving forward, I think a lot of this has to do with confidence, as you said.

Q    A hundred percent.

THE PRESIDENT:  Companies have never been more profitable.  They’re seeing record profits; it’s just they’re hoarding their cash, they’re not investing it.  A lot of banks have now recovered, but they’re not lending the way they used to.  Now, they need to have slightly tighter lending criteria than they used to have, obviously, because that was part of the reason that we had that housing bubble.  But one of the things we’ve talked about is, can we encourage banks now to take a look at customers who are good credit risks, but are being unfairly punished as a consequence of what happened overall?

There are some other ideas that we’re looking at on the housing front.  But I’ll be honest with you, when you’ve got many trillions of dollars’ worth of housing stock out there, the federal government is not going to be able to do this all by itself.  It’s going to require consumers and banks and the private sector working alongside government to make sure that we can actually get the housing moving back again.  And it will probably take this year and next year for us to see a slow appreciation again in the housing market.

What we can do is make sure we don’t do any damage.  And that’s what happened in this last month.  That’s why I was so frustrated by it, and I suspect that’s why you were so frustrated by it as well.

Q    Very much.

THE PRESIDENT:  The last thing I’ll say, though, is if we get the overall economy moving, if we pass this payroll tax cut, if we get some of these tax credits for businesses that we passed back in December extended into next year so that we’re giving incentives for folks to invest in plants and equipment now — if the overall economy is doing well, that means consumers are doing better; it also means that housing will start doing better as well.

All right?  Thank you so much for your great question.  (Applause.)

Q    Thank you.