HENDERSON: President Barack Obama unveiled a $1.5 billion package of measures aimed at helping victims of the US housing crisis, in Nevada, where the collapse hit particularly hard. “This fund’s going to help

out-of-work home owners prevent preventible foreclosures,” Obama said, adding that the program would also help threatened homeowners pay their mortgages.

The plan will include help for borrowers who now owe more than their home is worth after real estate prices collapsed, and will also aid those who took out second mortgages in a desperate bid to keep their houses.

It will apply to the states worst hit by the burst of the housing bubble that have seen the price of homes drop by over 20 per cent from their peak.

The White House says that while home prices have begun to stabilize, many people still find themselves owing more on their mortgage than the value of their home — so-called “underwater” mortgages.

The administration has already spent hundreds of billions of dollars trying to stabilize the housing market and reduce foreclosures that have multiplied across the country since the peak of the financial crisis in September 2008. Nevada, Florida and California, all once states with booming housing markets, have been worst hit by the sector’s collapse.

Obama was in Las Vegas area on Friday for a second day of stumping for Democratic candidates, and poured repeated praise on Senator Harry Reid, who leads Democrats in the Senate and risks

losing in November’s mid- term elections.