Obama Announces Mortgage Refinancing Plan

September 9, 2011

President Obama vowed to help more Americans refinance their mortgages during his speech to a joint session of Congress on Thursday.

“To help responsible home owners, we're going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent,” Obama said during his speech. Such a move would “put more than $2,000 a year in a family’s pocketbook and give a lift to an economy still burdened by the drop in housing prices,” he added. 

Obama’s speech provided no specifics about the refinancing plan. He used the speech mostly to preview his American Jobs Act, a bill that would include tax cuts for small businesses, extend unemployment benefits, and provide other aid that would set out to help workers and spur more jobs. 

Some critics said Obama’s speech did not contain enough to help the ailing housing market. 

“That’s not the bold stroke that I want,” Mark Vitner, a senior economist at Wells Fargo, told HousingWire after the speech. “It’s not just refinance; we want people to be able to sell their homes.”

Some housing advocates said more needs to be done to address the massive number of foreclosures plaguing many housing markets. 

“To get the economy moving forward, we simply must address the millions of people in danger of losing their homes to foreclosure,” adds Orson Aguilar, executive director of research group The Greenlining Institute. “This massive shadow inventory is a dead weight on the housing market and the whole economy, and we can’t ignore it.”

Some housing advocates praised the president’s refinancing proposal, saying it will help underwater home owners lock in record low rates and lower their monthly mortgage bill.

Source: “Obama Pushes Infrastructure Bank, Pledges Housing Fix,” American Banker (Sept. 8, 2011) and Obama’s Job Plan Doesn’t Do Enough for Housing, Critics Say,” HousingWire (Sept. 8, 2011)

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