Watch CBSN Live

Mortgage refinancing plan should be "no-brainer," Obama says

President Obama on Wednesday said he wants Congress to pass a package of housing reforms by the end of the year, calling his proposal to allow more homeowners to refinance their mortgages a "no-brainer."

"There shouldn't be an ideological barrier to getting this done," Mr. Obama said in a virtual town hall hosted by the online real estate database Zillow.

The first iteration of the government's refinancing program, the Home Affordable Refinance Program (HARP) was unveiled in 2009. The program helps underwater homeowners refinance their mortgages; the president wants to extend HARP to loans that aren't backed by the government.

Mr. Obama made the case that allowing more homeowners to refinance would be good for the entire economy, since consumers would have money to spend both in the housing market and outside of it. The president said that he and First Lady Michelle Obama would benefit from refinancing their home in Chicago.

"There's no doubt somebody like Michelle and I who bought our house several years ago, if we went to the market right now, we'd end up saving some money," he said.

The event, in which citizens submitted questions to the president via social media, followed a speech the president delivered on Tuesday where he proposed winding down the pseudo-government agencies Fannie Mae and Freddie Mac.

The president said that while he thinks the private market should have a bigger role in the housing market, the government can still serve as a "backstop," taking steps like ensuring simple tools like the 30-year fixed mortgage rate remains available.

If Congress did pass such legislation, Fannie and Freddie would have to be gradually phased out, Mr. Obama said, to avoid "a big shock to the system."

The president also noted that interest rates have remained relatively low, and that if "we keep interest rates low, that will help."