Economy

Obama: Mortgage crisis must be ended to better economy

WASHINGTON — President-elect Barack Obama Saturday said he will nominate New York housing official Shaun Donovan as Secretary of Housing and Urban Development, calling the job "essential" to restoring the economy.

"To end this economic crisis, we must end the mortgage crisis where it began. This all started when Americans took out mortgages they couldn't afford," Obama said in his weekly radio address to be delivered Saturday morning and distributed on YouTube.

Noting that one in 10 homeowners now faces some form of financial problem, a record high, Obama said he's already asked his forming administration to produce a plan that help more people keep their homes.

He called the Housing and Urban Development job "essential" to that government-wide work, and called Donovan uniquely qualified to fixing the problem with a balance of help for needy families and the recognition that they should only buy what they can afford.

"He knows that we can put the dream of owning a home within reach for more families, so long as we're making loans in the right way, and so long as those who buy a home are prepared for the responsibilities of homeownership," Obama said.

An adviser to Obama's campaign, Donovan, 42, is commissioner of the New York City Department of Housing Preservation and Development, where he oversees a $7.5 billion program to provide affordable housing to 500,000 people.

While there, he's overseen efforts to handle the problems caused by the mortgage crisis, most notably the rise in foreclosures on people who fell behind on their mortgages.

The department, for example, helped create a center offering counseling, education and legal services to help owners or renters facing evictions stemming from foreclosure to stay in their homes. In 2005, it started offering education, credit and legal assistance to those most at risk of predatory lending.

He was named to the post in 2004 by New York Mayor Michael Bloomberg.

Before that, he was a HUD official in the Clinton administration and worked at Prudential Mortgage Capital Company managing its Federal Housing Administration lending and affordable housing investments.

Youn hear the Obama radio address at

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