President Obama in his third State of the Union speech last night called on Congress to pass a plan to help millions of underwater home owners refinance into loans with historically low interest rates by charging banks a fee to help expedite these transactions.
“I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage by refinancing at historically low rates,” Obama said. “No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won’t add to the deficit and will give those banks that were rescued by taxpayers a chance to repay a deficit of trust.”
Congress has previously looked at a proposal to charge banks a fee to help home owners who remain underwater, but it’s not clear from the details Obama provided how similar this plan is to the one Congress has already considered.
NAR, without weighing in on the merits of the fee, says it stands ready to help with any effort to streamline the mortgage refinance process. Beyond that, NAR calls for making the struggling housing market a national priority, because until housing recovers, the economy can’t recover. “REALTORS® believe that more must be done to stem the rising inventory of foreclosed homes and address the lack of available and affordable mortgage financing, which is inhibiting a meaningful housing market recovery,” NAR President Moe Veissi said in a statement released last night.
Obama also talked about efforts to hold lenders to account for making loans during the housing boom they knew households couldn’t afford. He said he’s asking the U. S. Attorney General to create a unit of federal prosecutors and state attorneys general to expand investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. “This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans,” he said.
He also pointed to provisions in the big Wall Street reform law enacted two years ago that’s intended to make future bank bailouts unnecessary by requiring financial institutions to provide the government with a plan for the orderly wind-down of their operations should they become insolvent. “The rest of us are not bailing you out ever again.” he said.
To help create what he called more tax fairness and to help reduce the federal deficit, the President talked about tax code changes so that “millionaire” taxpayers pay tax rates of at least 30 percent, while taxpayers earning under $250,000 wouldn’t face any increase in taxes.
More broadly, Obama spoke about tax code changes to encourage businesses to keep manufacturing and other jobs in the United States or return them to the country if they’re already outside it.
In the video clip above, President Obama describes his plan for helping underwater home owners refinance theur mortgage.
Watch the speech in its entirety.
Read a transcript of the speech.
More on NAR’s Home Ownership Matters efforts.