This evening, President Obama introduced a new housing plan that will allow all homeowners who are current on their payments to be able to refinance their mortgage at the current historically low market rates, mirroring Congressman Dennis Cardoza's (D-Merced) Housing Opportunity and Mortgage Equity (HOME) Act.
"If President Obama means what he says, I could not be more pleased," said Congressman Cardoza. "He must understand that the key is execution and cutting the red tape for struggling homeowners is essential. He must implement this plan immediately in a simple and effective way. People have waited far too long to be weighed down by any more bureaucracy."
The President announced in his State of the Union speech that he will send Congress a plan that will allow responsible homeowners who are current on their payments to save $3k a year on their mortgage by refinancing at historically low interest rates. The President is proposing to use part of a proposed bank fee to cover the cost of the refinancing plan, since some of the financial institutions helped cause the housing crisis from which borrowers and the economy are still trying to recover.
The President stated in his address,
"[M]illions of innocent Americans [have] seen their home values decline. And while Government can't fix the problem on its own, responsible homeowners shouldn't have to sit and wait for the housing market to hit bottom to get some relief."
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.
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.