Today, Congressman Dennis Cardoza (D-CA) called on President Obama to address the housing crisis in tomorrow's State of the Union speech before, and include in his agenda for 2012 a far-reaching mortgage refinancing program such as Cardoza's proposal, the Housing Opportunity and Mortgage Equity (HOME) Act.
In 2009, Congressman Cardoza first introduced the HOME Act (H.R. 383), which would help up to 30 million struggling homeowners with mortgages backed by Fannie Mae or Freddie Mac to benefit from current historically low market interest rates and refinance for up to 40 years at a fixed single-digit rate. This would significantly lower the homeowner's monthly mortgage payments, resulting in fewer foreclosures, while stabilizing the housing market and the national economy.
"Simply put, none of the current housing programs that President Obama has instituted have succeeded in stemming the tide of foreclosures still dragging down our country. People continue to suffer as their communities are devastated by the housing crisis, with no relief in sight," said Congressman Cardoza. "We need bold leadership from the President on this crisis."
Congressman Cardoza represents California's Central Valley, which has been ground zero for the housing crisis. In some communities, over 53 percent of mortgages are underwater. 70,000 people have lost their homes to foreclosure since the crisis began in 2007.
Earlier this month, Federal Reserve Chairman Ben Bernanke released a report reiterating Congressman Dennis Cardoza's (D-CA) longstanding argument that bold, far-reaching action is needed to stem the housing crisis and spur economic recovery.
According to Bloomberg News, the Fed's report concluded,
"A policy of no action will lengthen the housing slump, generate higher costs to the economy, push home prices lower and prolong "downward pressure on the wealth of current homeowners and the resultant drag on the economy at large.'"
Also echoing Congressman Cardoza's calls to address the housing crisis, Ezra Klein of the Washington Post wrote a column calling for President Obama to tackle the housing crisis by enacting a far-reaching mortgage refinancing program. Klein, a nationally syndicated columnist, argued that the President should listen to the advice of Glenn Hubbard, who served as President George W. Bush's chief economist:
"Hubbard is an advocate for using Fannie Mae and Freddie Mac to set off a nationwide wave of mortgage refinancing. In a paper co-authored with Columbia economist Christopher Mayer, Hubbard estimates that more than 75 percent of the homeowners with 30-year mortgages backed by Fannie or Freddie are paying interest rates higher than 5 percent. But for the past two years, interest rates have been closer to 4 percent. That means tens of millions of Americans are paying more than they need to every single month."
"[These] homeowners represent one of the president's few remaining opportunities to help a substantial number of Americans. That's because a major push on refinancing is one of the few policies the Obama administration could accomplish without the help of Congress."
Congressman Cardoza has also repeatedly called on the President to appoint a permanent director to the Federal Housing Finance Agency (FHFA) to replace Acting Director Edward DeMarco. The FHFA, as the conservator of Fannie Mae and Freddie Mac, has the statutory authority to institute a far-reaching mortgage refinancing program, similar to Cardoza's HOME Act, which could aid up to 30 million homeowners.
"Mr. DeMarco has proved himself incapable or unwilling to aggressively combat the housing crisis," said Congressman Cardoza. "It is time for the President to step up and nominate a new Director who will use his existing authority to bring relief to millions of homeowners nationwide. I will be listening intently tomorrow to President Obama and hope he heeds my call to act boldly and decisively."