President Obama’s Plan To Boost The Housing Market

With the housing market in the doldrums, it is difficult to have an economic recovery.

Home prices are on average one-third below where they were in 2006. Mortgage interest rates are at record lows but most of the homeowners who most need a refinance can not get one because their home is underwater (more is owed on the mortgage than it is worth).

President Obama plans to intervene yet again in the housing market. He wants to subsidize the losers with money taken from people who’ve made more responsible financial choices.

(Bloomberg) — President Barack Obama answered Ben S. Bernanke’s appeal for more action to fix the U.S. housing market that’s restraining the economic recovery by proposing a plan to help borrowers reduce their monthly mortgage payments.

Obama is sending Congress legislation that would allow homeowners to tap record-low borrowing costs, potentially boosting housing as he seeks re-election this year. The proposal could save participants about $3,000 a year, Obama said in his State of the Union speech to Congress.

Even with unemployment at the lowest level since February 2009 and housing sales increasing, homeowners have been blocked from refinancing by house prices that are 32 percent below their 2006 peak and tightened bank lending. While parts of the plan may face opposition in a divided Congress, and it’s important to see details, the approach is “a big step forward,” said Christopher Mayer, a Columbia Business School professor.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
This entry was posted in Banks, mortgage, Politics, Rates, Refinance and tagged , , , , , . Bookmark the permalink.