President Obama recently introduced a mortgage refinance plan in an attempt to shake things loose in a housing market showing signs of recovery. But as is typical with politics these days, the only thing he shook up was rhetoric and posturing.
California Democratic Congresswoman Zoe Lofgren says some ideas are ?quite good,? but ?unfortunately a large portion of it would require legislation, and we have seen that the Republicans ? are unwilling to pass legislation.?
Countered California Republican Congressman John Campbell: ?Like many things that are happening right now, particularly from the president, this is a campaign-oriented proposal and not something that is intended to actually ever become law.?
So can it become law? Should it? Are any of the proposals worth giving a chance, or are the problems too deep, cumbersome and volatile?
According to a White House press release, some of the plan?s key proposals include:
Broad-based refinancing to help responsible borrowers: The plan would provide borrowers who are current on their payments with an opportunity to refinance, cut through the red tape and perhaps save up to $3,000 a year. Sometimes homeowners with good credit and clean payment histories have reported being rejected because their mortgages are underwater.
Homeowner Bill of Rights: This would be a single set of standards to make sure borrowers and lenders play by the same rules, including access to a simple mortgage disclosure form, full disclosure of fees and penalties, guidelines to prevent conflicts of interest and protection for families against inappropriate foreclosure.
Investigating mortgage origination and servicing abuses: This would provide new resources to investigate misconduct that contributed to the financial crisis.
Rehabilitating neighborhoods and reducing foreclosures: Among other things, this would increase incentives for modifications that help borrowers rebuild equity.
A roundup of reactions from Housing Wire includes:
Department of Housing and Urban Development Secretary Shaun Donovan said the bill would essentially shift the decision-making to homeowner when it comes to refinancing: ?The bank will have no ability to say no to homeowners if we get this bill passed and get this program established.?
Rep. Spencer Bachus, R-Ala., chairman of the House Financial Services Committee claims the program would unnecessarily shift risk to the Federal Housing Administration: ?This is not a serious plan to help the nation?s housing market. President Obama is proposing to get out of the hole we?re in by digging deeper.?
Sen. Jack Reed, D-R.I., said anything to help the foreclosure situation is a good move:
?Instead of letting these homes sit vacant and drag down neighboring property values, lets give families the chance to move in, pay rent and be good neighbors.?
Mortgage Bankers Association CEO David Stevens would like to have a single set of standard for lenders because it would ?help provide confidence and certainty in the real estate market for borrowers, lenders and servicers alike.?
Former FHA commissioner Brian Montgomery said the plan ?appears to be the right and proper thing to do. However it remains to be seen the level of participation and ultimately what cost, if any, to the taxpayers, most of which have grown weary of the nagging housing crisis.?
Source: http://www.blog.househuntnetwork.com/2012/03/houseingplan/
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