Analysis: A New Initiative To Help Homeowners, But Can It Fly?
The president just announced a new initiative to help homeowners save money by refinancing their mortgages:
"Responsible homeowners shouldn't have to sit and wait for the housing market to hit bottom to get some relief.
"That's why 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 interest rates. 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 banks that were rescued by taxpayers a chance to repay a deficit of trust ..."
Some economists from both the right and the left of the political spectrum have been pushing for more refinancing. They feel that credit has become too tight, and too many Americans are unfairly stuck in higher-rate mortgages.
Mortgage experts say more could be done by the president, particularly with taxpayer-controlled firms Fannie Mae and Freddie Mac. But by calling on Congress to pass legislation, by taking that route, it might be unlikely that the president will be able to get such legislation through Congress in an election year.
Also — Obama talked about paying for the program with some form of new fee or tax. Again — an unlikely prospect in an election year.
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