President Obama did use the State of the Union to outline his administration’s proposal to provide homeowners with privately held mortgages not backed by Fannie Mae or Freddie Mac to have the opportunity to refinance at record low rates for borrowers with good credit but underwater on their mortgage loan. President Obama spent Wednesday detailing the proposed mortgage relief program at the James Lee Community Center in Falls Church, VA. The entire fact sheet on the proposed mortgage relief program can be found at the FACT SHEET: President Obama’s Plan to Help Responsible Homeowners and Heal the Housing Market. The controversy is concerning on the paying for the mortgage relief by taxing banks up to 10 billion in “Financial Crisis Responsibility Fees” to help millions of homeowners refinance into cheaper mortgages. The republicans would be the first to object in an election year, but the American Bankers Association(ABA) has issued a statement with concern’s over the proposed mortgage relief program.
In a statement made by Frank Keating, CEO, American Bankers Association, he stated three major concerns over the refinance proposal made by the Obama Administration. First, the proposal would delay or limit any future housing recovery. Second, the tax being proposed against the banks to pay for the program. Third, the taxation would impact a reduction of lending capacity up to $100 billion. Mr. Keating further states…
“ABA is concerned that uncoordinated and ever-changing government programs, including those detailed today, create uncertainty in the market, increase the cost of homeownership, and reduce credit availability needed to support homeownership and the economic recovery.
Mr. Keating does provide some valid points on the concerns of the program, but some initiative needs to take place. Government intervention may cause uncertainty in the market, but the banking industry has been the menace behind some of the uncertainty. Precedent does show limited success and results with previous initiatives by the Obama administration. What is the difference in this program to ensure broader success to bring some ease to homeowners and the foreclosure crisis?
- Mixed reviews for President Obama’s housing plan (cbsnews.com)
- Obama pitches broader refinance program (oregonlive.com)
- Obama Proposes Mortgage Relief, With Romney in Mind – New York Times (nytimes.com)
- New Obama Housing Plan Not Winning Republican Fans (blogs.wsj.com)
- ABA Leader Frank Keating to Keynote IBA Management Conference (ibaeducationblog.com)
- Obama Outlining New Plan To Help Struggling Americans (huffingtonpost.com)
- New Presidential Mortgage Relief Plan (rentersinsurance.com)
- Obama to detail broader housing refinance plan (seattletimes.nwsource.com)