In State of the Union speech, Obama proposes easier mortgage refinancings

New York /
Jan.January 25, 2012 09:00 AM

Continuing to see mortgage refinancing as the road to recovery, President Barack Obama laid out an ambitious new plan for distressed homeowners to help spur the nation’s housing market in his State of the Union address.

Bloomberg News reported that Obama will send legislation to Congress that would make it easier for all “responsible” homeowners to refinance at near record-low rates, a move that could save the average participant about $3,000 annually. The legislation is an expansion of Obama’s existing Home Affordable Refinance Program (HARP), according to Trulia, as it would extend eligibility to the 2.5 million underwater borrowers without government-backed loans.

Obama said it would reduce obstacles for American homeowners who have been unable to refinance because their mortgages are worth more than their homes. But the proposal would still only apply to homeowners who are current on their mortgages.

The plan would be funded by imposing a “small fee” on large financial institutions with at least $50 billion in assets.

Obama’s proposal answered Federal Reserve Chairman Ben Bernanke’s call for more government involvement in the housing market, but didn’t go so far as to reduce the principal balances on struggling borrowers’ homes, which some analysts suggest is the only effective way to hasten the speed of the recovery. Analysts interviewed by Bloomberg were divided on whether the legislation would ultimately be passed.

The president also created a new mortgage abuse investigative unit in his speech last night, and tapped New York Attorney General Eric Schneiderman to lead it. [Bloomberg] and [Trulia]


Related Articles

arrow_forward_ios
1295 Madison Avenue, Lantern Real Estate’s Tal Bar-or, Adellco’s Matthew Adell and G4’s Jason Behfarin (iStock, The Wales, Lantern Real Estate, American Friends of Blérancourt, G4, Illustration by Kevin Cifuentes for The Real Deal)
Adellco scores $95M refi for Madison Avenue condo conversion
Adellco scores $95M refi for Madison Avenue condo conversion
44th U.S. President Barack Obama (Getty Images, iStock/Photo Illustration by Steven Dilakian for The Real Deal)
Barack Obama blasts liberal NIMBYs
Barack Obama blasts liberal NIMBYs
Rudin Management CEO Bill Rudin and 3 Times Square (Getty Images, 3 Times Square, iStock)
Rudin gets $415M refi for 3 Times Square makeover
Rudin gets $415M refi for 3 Times Square makeover
Taconic's Charles Bendit and Paul Pariser with rendering of One Essex Crossing (Taconic Partners, VMI Studio)
Essex Crossing developers land $466M refi
Essex Crossing developers land $466M refi
Arch's Jeffrey Simpson and Adam Neumann with 88 University Place (Arch Companies, Getty, Google Maps)
Former WeWork hub, hollowed out by IBM’s exit, gets $70M refi
Former WeWork hub, hollowed out by IBM’s exit, gets $70M refi
520 Fifth Avenue, 1450 Broadway and 1 Times Square (Kohn Pedersen Fox, 1450 Broadway, Bernt Rostad from Oslo Norwayedited by Yarl CC BY 2.0 via Wikimedia Commons)
Times Square lands Manhattan’s biggest loan deals in April
Times Square lands Manhattan’s biggest loan deals in April
Lev CEO Yaakov Zar (LinkedIn, iStock)
CRE finance marketplace Lev raises $70M Series B, confirming TRD report
CRE finance marketplace Lev raises $70M Series B, confirming TRD report
 Extell’s Gary Barnett with Times Square Hard Rock Hotel (iStock)
Gary Barnett’s Extell repeats as Manhattan’s top borrower
Gary Barnett’s Extell repeats as Manhattan’s top borrower
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...