Obama To Bypass Congress On Mortgages
WASHINGTON (WWJ/AP) – With Republicans continuing to stall action on President Obama’s $447 billion jobs bill, the White House is taking action to help jump-start the economy with the message “We can’t wait.”
President Barack Obama offered mortgage relief on Monday to hundreds of thousands of Americans, his latest attempt to ease the economic and political fallout of a housing crisis that has bedeviled him as he seeks a second term.
“I’m here to say that we can’t wait for an increasingly dysfunctional Congress to do its job,” the president declared in remarks prepared for an appearance in Las Vegas, the epicenter of foreclosures and joblessness. “Where they won’t act, I will.”
Under Obama’s proposal, homeowners who are still current on their mortgages would be able to refinance no matter how much their home value has dropped below what they still owe.
“Now, over the past two years, we’ve already taken some steps to help folks refinance their mortgages,” Obama said, listing a series of measures. “But we can do more.”
At the same time, Obama acknowledged that his latest proposal will not do all that’s not needed to get the housing market back on its feet. “Given the magnitude of the housing bubble, and the huge inventory of unsold homes in places like Nevada, it will take time to solve these challenges,” he said.
Ken Mascia, president of Prime Capital Mortgage in Bloomfield Hills said it’s a good plan that will open doors for many people.
“What this plan talks about is making it possible for virtually anybody with a Fannie Mae or Freddie Mac guaranteed loan to refinance as long as their credit standing is still good and they’re employed and can, you know, make payments,” Mascia told WWJ Newsradio 950.
The plan would cut the cost of refinancing and removes caps for deeply underwater borrowers.
Kelly Sweeney, CEO of Coldwell Banker-Weir-Manuel, told WWJ this will work for homeowners on the bubble.
“If they had a mortgage that had an interest rate of say five and a half or six percent that was four or a five years old and they could write it down near four percent today, that might make the difference in allowing them to stay in that home and continuing to make payments as letting it go into foreclosure,” said Sweeney.
Sweeney added, however, that it won’t be enough to turn around the housing crisis. In fact, he said the market is beginning to stabilize in southeast Michigan.
Making a case for his policies and a new effort to circumvent roadblocks put up by Republican lawmakers, Obama also laid out a theme for his re-election: “There is no excuse for the games and gridlock we’ve seen in Washington. Folks out here don’t have the time or the patience for it.”
The Associated Press contributed to this report.