Way too little, way too late

http://www.freep.com/article/201202...t-Obama-A-plan-to-help-responsible-homeowners

President Obama: A plan to help responsible homeowners

In my State of the Union address, I laid out a blueprint for an economy that's built to last -- an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values of fairness and responsibility.

Over the past decade, we strayed from those values and we saw what happened. Millions of families who did the right thing were hurt when the massive housing bubble burst.

Folks who shopped for a home they could afford, secured a mortgage and made their payments each month were hurt by those who weren't playing by the same rules: lenders who sold loans to people who couldn't afford them, buyers who bought homes they knew they couldn't afford, and banks that packaged and traded bad mortgages to reap phantom profits.

These actions triggered the worst economic crisis of our lifetimes, and the housing crisis remains the single biggest drag on our recovery.

It will take more time than any of us would like for the housing market to fully recover from this crisis, and government certainly can't fix the entire problem on its own. However, it is wrong for anybody to suggest that the only option for struggling, responsible homeowners is to sit and wait for the housing market to hit bottom.

This is a make-or-break moment for the middle class, and this housing crisis struck right at the heart of what it means to be middle class in America: owning a home.

The housing plan we launched a couple years ago has helped nearly a million responsible homeowners refinance their mortgages and save an average of $300 each month. But even with rates at historic lows, too many families are underwater and unable to refinance.

There are more than 10 million homeowners across the country who, because of an unprecedented decline in home prices, owe more on their mortgage than their homes are worth. For those responsible homeowners, there are actions we can take now to provide some relief.

That's why I'm sending Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage by refinancing at today's low rates. No more red tape or 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 those banks that were rescued by taxpayers a chance to repay a deficit of trust.

This plan will not help those who bought a house they could not afford and then walked away. It's not designed for those who've acted irresponsibly or those who flipped multiple homes to make a quick buck. But it will help millions who make their payments on time and yet remain trapped under falling home values.

For this, we need Congress to act. Until it does, however, I will not wait to prevent the same kinds of abuses that led to this crisis in the first place. To hold people who broke the law accountable and turn the page on an era of recklessness, I asked my attorney general to establish a special task force to investigate the irresponsible actions of those banks that packaged and sold risky mortgages.

I'm also proposing a Homeowners Bill of Rights -- one straightforward set of commonsense rules for families shopping for a mortgage. No more hidden fees and no more getting the runaround when you call about your loan. New safeguards against inappropriate foreclosures and new options to avoid foreclosure if you've fallen on hardship or a run of bad luck. And because Americans making a down payment on their dreams shouldn't be terrified by pages and pages of fine print, a simple form for new buyers with clear terms and transparent fees.

An economy that's built to last demands responsibility from everyone. Government must take responsibility for fair rules, and banks and lenders must end the practices that helped cause this crisis in the first place. To recover from the worst economic crisis of our lifetimes, all of us need to take responsibility for our actions.

I'll keep doing everything I can to make the future brighter for homeowners and families. But Congress needs to act, too. If you're a homeowner who wants to refinance, call your members of Congress. Tell them not to hold up relief for homeowners like you. Tell them to pass this plan, help families rebuild their dreams, and make our economy stronger.

Barack Obama is president of the United States.

 

3,000 x 10,000,000 = 30B.

He gave the banks $1.6T.

That's why it's too little. The banks were made whole at the expense of all the "regular" main street people being underwater in their homes.

At this point, the govt. would be better off buying foreclosed homes and bulldozing them. Why? Supply/Demand curve. It reduces supply, lifting the value of the remaining homes.

 

He's assuming that after 10 years, you've paid off some % of your principal and refinancing the remainder at 30 years saves the homeowner money. But it doesn't.

 

I've paid off 2% of the principle on my mortgage each of the first two years.

 

I have a 1st loan at 6.25%, not 10%.

The savings isn't so great.