President Obama today announced his latest plan to revive the housing market, outlining a proposal intended to help homeowners take advantage of historically low mortgage interest rates, even if they owe more than their homes are worth.
"This housing crisis struck right at the heart of what it means to be middle-class in America: our home," the president said in a speech at a community center in Falls Church, Va. "It's personal. It affects so much of how people feel about their lives, about their communities, about the country, about the economy. We need to do everything in our power to repair the damage and make responsible families whole again."
Following up on a proposal outlined in his State of the Union address, the president has asked Congress for a tax on large banks to help "responsible homeowners" who are current on their payments refinance at today's low rates.
"No more red tape. No more runaround from the banks. And a small fee on the largest financial institutions will make sure that it doesn't add to our deficit," the president said, predicting that his plan would save the average borrower roughly $3,000 a year.
While the proposal faces an uphill battle in Congress, Obama said he is not waiting to take action. Announcing a new homeowners' Bill of Rights and streamlined mortgage form, the president explained that he understands what it's like to be stumped by all the paperwork.
"I remember when Michelle and I bought our first condo, and we were both lawyers. And we're looking through the forms, and we're kind of holding it out reading it again: What does this phrase mean? And that's, you know, for two trained lawyers," he said.
"The forms, the confusion, the potential for abuse is too great, just because the forms were too complicated. So this is what a mortgage form should look like," he said brandishing the new one.
Calling the housing challenge "massive in size and in scope," the president admitted his previous efforts to boost the housing market have not lived up to his expectations. "I'll be honest. The programs that we put forward haven't worked at the scale we hoped," he said.
The president's latest proposal comes as the Republican presidential candidates head to Nevada, the state with the highest foreclosure rate in the country. "After promising to help millions, we continue to see the same proposals from President Obama and getting the same results, a deepening housing crisis," Republican National Committee spokeswoman Kirsten Kukowski said in response to the president's speech. "Americans are tired of talking in circles on housing, tired of the rhetoric, they want results and in November they're going to elect someone who can deliver."