In a Town Hall Twitter session at the White House last July President Obama, when asked what he would have done differently since he became president answered, "I wish I could have done more to help homeowners stay in their homes."
|President Obama holds up a proposed one-page mortgage application at |
James Lee Recreation Center in Falls Church, Va.
"It was wrong. It triggered the worst economic crisis of our lifetimes. And it has been the single biggest drag on our recovery from a terrible recession", President Obama said.
Homeowners currently owe more on their mortgages than the current value of their homes.
The president announced his strategy to help homeowners save nearly $3,000 a year on their mortgage by refinancing at historically low rates, and vowed to make the home buying application process simpler.
"No more red tape. No more runaround from the banks."
The president recounted the time he and the First Lady (both attorneys at the time) had trouble understanding all the details of their mortgage application. "We looked at it and said, what is this?
The president held up a proposed one-page mortgage application saying "This is what a mortgage form should look like", upon as he announced his new "Homeowner Bill of Rights".
"Now that our new consumer watchdog agency is finally running at full steam, they can move forward on important protections like this new, shorter mortgage form", said the president.
"Simple, not complicated. Informative, not confusing. Terms are clear. Fees are transparent."
The president said his proposal would not add to the existing deficit, suggesting that a small fee on the largest financial institutions will help fund his proposal.
The president has suggested that already foreclosed properties be turned into rental homes.
"Because as we know and a lot of families know, that empty house or 'for sale' sign down the block can bring down the price of homes across the neighborhood."
During today's Secretary of Housing and Urban Development, Shaun Donovan speaking at today's White House briefing said homeowners currently underwater who chose to refinance would could get a new loan without being told 'no' by the banks. Under the administration's proposal a homeowner could refinance into a new FHA loan, allowing the homeowner to pay off the old loan.
"This is smart economic housing policy", said Donovan.
Still, the bill has to go through Congress, who have suggested the bill is 'dead on arrival'.
The president, in response to Congress' planned blockage of the bill, said his administration would "keep building a firewall to prevent the same kinds of abuses" that led to the initial homeowner crisis.
"The places where we invest our nest eggs, raise our kids, plant roots in our communities, build memories. We need to do everything in our power to repair the damage and make responsible families whole."
"It's personal", the president said.
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