Obama unveils mortgage refinancing plan
President Barack Obama holds up a proposed mortgage application form as he speaks at the James Lee Community Center in Falls Church, Va., Wednesday, Feb. 1, 2012.
/ AP Photo/Cliff OwenPresident Obama on Wednesday unveiled a proposal aimed at making it easier for Americans to refinance their mortgages, urging Congress to act on what he called a "make-or-break moment for the middle class."
Speaking to a crowd in Falls Church, Virginia, the president laid out a plan, originally outlined in last week's State of the Union address, he said would "give every responsible homeowner in America the chance to save about $3,000 a year on their mortgage by refinancing at historically low rates."
"What this plan will do is help millions of responsible homeowners who make their payments on time but find themselves trapped under falling home values or wrapped in red tape," he said. "If you're ineligible for refinancing just because you're underwater on your mortgage, through no fault of your own, this plan changes that. You'll be able to refinance at a lower rate, you'll be able to save hundreds of dollars a month you can put back in your pocket. Or you can choose those savings to rebuild equity in your homes - which will help most underwater homeowners come back up for air more quickly."
He also outlined what he called a "Homeowners Bill of Rights," or, "one straightforward set of commonsense rules of the road that every family knows they can count on when they're shopping for a mortgage."
That set of rules, aimed at protecting borrowers, would demand simple mortgages with no hidden fees; would put in place guidelines to prevent conflicts of interest damaging to homeowners; give support to families who are current on their payments; and provide protection against inappropriate foreclosure.
"No more hidden fees or conflicts of interest," Mr. Obama said. "No more getting the runaround when you call about your loan. No more fine print that you use to get families to take a deal that as not as good as the one they should have gotten. New safeguards against inappropriate foreclosures. New options to avoid foreclosure if you've fallen on hardship or a run of bad luck. And a new, simple, clear form for new buyers of a home."
The president recalled his and First Lady Michelle Obama's experience buying their first home together - a process he described, humorously, as so complicated that the two of them would end up looking through the forms and asking "what does this phrase mean?"
"And that's, you know, for two trained lawyers," he laughed.
He held up a one-page mock-up of what he wants such forms to look like in the future, and pointed to the Consumer Finance Protection Bureau (CFPB) as a means to achieving that end.
"Now that our new consumer watchdog agency is finally running at full steam, now that Richard Cordray is in as the director of the CFPB, they are moving forward on important protections like this new, shorter mortgage form," Mr. Obama said.
The goal, he said, was to make things "simple, not complicated," to protect consumers from getting "cheated."
"Terms are clear. Fees are transparent," he said.
The president painted his agenda as a stark contrast to that which Republicans favor.
"This, by the way, is what some of the folks in Congress are trying to roll back and prevent from happening," Mr. Obama said, referencing widespread Republican opposition to the power granted to CFPB to serve as a consumer watchdog agency.
"I guess they like complicated things that confuse consumers and allow them to be cheated. I prefer actions that are taken to make things simpler and easier to understand for consumers so that they can get the best deal possible - especially on the single biggest investment that most people will ever make," he said.
Another facet of the plan would turn foreclosed homes into rental properties because, as Mr. Obama noted, "that empty house or for sale sign down the block can bring down price of homes across the neighborhood."
"We're working to make sure people don't lose their homes just because they lost their job," he said. "These are steps that can make a concrete difference in people's lives right now."
Mr. Obama framed the issue to voters in personal terms.
"I've been saying that this is a make-or-break moment for the middle class, and this housing crisis struck right at the heart of what it means to be middle-class in America," he said. "Our homes, the place where we invest our nest egg, the place where we raise our family, the place where we plant roots in a community... It's personal. It affects so much of how people feel about their lives, about their communities, about the country, about the economy."
Taking an apparent swipe at Republican presidential candidate Mitt Romney, who in October told the Las Vegas Review Journal's editorial board that the government should not try to stop the foreclosure process but rather "let it run its course and hit the bottom," Mr. Obama argued that "it is wrong" to make responsible homeowners wait out the crisis.
"It is wrong for anyone to suggest that the only option for struggling, responsible homeowners is to sit and wait for the housing market to hit rock bottom. I refuse to accept that and so do the American people," he said.
"Government must take responsibility for rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that helped cause this crisis in the first place. And all of us must take responsibility for our own actions - or lack of action," Mr. Obama said. "So I urge Congress to act. Pass this plan. Help more families keep their homes. Help more neighborhoods remain vibrant. Help keep more dreams defended and alive. And I promise you that I will keep doing everything I can to make the future brighter for this community, this commonwealth, for this country."
When asked about Mr. Obama's proposal following the remarks on Wednesday, House Speaker John Boehner dismissed it as the latest in a series of failed pitches.
"One more time? One more time? How many times have we done this? We've done this at least four times where there's some new government program to help homeowners who have trouble with their mortgages," he said. "None of these programs have worked. And I don't know why anyone would think that this next idea is going to work."
Romney, meanwhile, suggested on Tuesday that Mr. Obama would have trouble getting re-elected due the state of the housing crisis. "If you are part of the housing crisis, you are probably not going to get elected president," he said.
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"We're working to make sure people don't lose their homes just because they lost their job," state Obama.
In-context or out-of-context, this statement makes no sense. Did owning or buyng a home become the next "right" or "entitlement"? Or did having a job that enables one to buy a home become the next new "right"? There is nothing inherently wrong with renting shelter.
1. You must be a minority
2. You must have lousy credit
3. You must be late on your payments.
If you do not meet this criteria, then all you have to do is continue to wait for change in November!
Secondly, I can't think of many common investments that if you lose money it is as a result of investor. Take stocks, bonds, mutual funds or real estate.
Taxpayers should not have to bail-out homeowners. Buying a home has always been a risk. I sold homes and never once was my buyer uninformed regarding their mortgage and I always pre-qualified buyers and explained the hidden costs of owning a home. Plus buyers should understand that taxes, utilities and insurance can always go up and increase their mortgage payment and monthly expenses.
Many who have lost the most equity bought homes at inflated prices and would have been better off renting and waiting for prices to correct.
Our employees Profit Sharing Plan and Trust lost huge value, I don't see the Government giving me any tax credits on the amount of decrease in value or the amount my home has lost value even when I have paid of my mortgage. I say no tax payer money to assist homeowners refinance. No tax payer dollars to "pay off homeowners principle to bring down the amount owed. No dollars to give those unemployed or disabled up to $50,000 interest free, subordinate(and doesn't have to really be paid back if they cant)to help them pay their mortgage.
Fannie and Freddie started this mess at the urging of both the Clinton and Bush Admin. Private lenders followed suit. But basically, buyers saw a "too good to be true" deal and took it.
They had bad real estate agents and failed to read what they were signing. I hardly call that no fault of their own.
He has been cleaning up messes from all these past Presidents and has dealt with our enemies while These Republicans have committed treason and terrorism against our government and the office of THE PRESIDENT by taking a check for a salary from the taxpayers and not working. They have constantly criticized him, played back seat driver and been petty about matters that could have helped just one American. The Republican leaders have been disloyal to America and they should be voted out! The Republican leaders have betrayed their office by plotting to overthrow our President while he has managed to work tirelessly for every American and many cases coming up above the fray and being successful. These Republicans have created a double in the minds of some of our enemies of who is in charge in The White House and by doing so; have made his job extremely difficult. Some of these Republicans jumped on planes trying to unmind our President in these foreign countries with no consequences of their treasonous actions, and constantly showing these people a false sense of security. Mitt Romney will spend his time guarding his millions or billions in other countries and his 15% tax rate and Newt is just a flip flopping dog who doesn't deserve the time of day! By the way Newt bragged about stopping Hillary care. He is a direct result of health care being out of control and it would have been easy to fix it back then! My health care jump 400% since then and my services diminished greatly while my deductibles went up! I like the direction health care is headed and already I have saved greatly by having my college aged children under the umbrella of my policy! Dismantle it is a hell no; correct some of it is a hell yes! By the way, Hilliard Rodman Clinton is one of a kind and the best medicine America has! Democrats work hard in spite of the petty mess. Look at the success of our past Democrat Presidents and the example of service that they give around the world! Don't vote any more Halliburton's in, or gun running Oliver North's or Iran Contra's in or ease droppers.
Vote for our President. He deserves our loyalty! No one measures up to him!