By Nevada News Bureau Staff President Obama will today announce he is expanding a federal aid program to allow more homeowners to refinance their mortgages at today’s low interest rates, said White House officials this morning.
The Federal Housing Finance Agency’s announcement on changes to the Home Affordable Refinance Program (HARP) includes enabling borrowers who are current on payments to refinance their mortgages regardless of the value of their homes, said HUD Secretary Shaun Donovan and Director of the National Economic Council Gene B. Sperling on a White House conference call.
Under the previous program’s guidelines mortgage restructuring was available only to homeowners owing no more than 125 percent of their property’s present appraised value, a restriction that prevented homeowners in hard hit states such as Nevada and California from getting relief.
The revised federal program would also reduce the number of homeowner-paid appraisals during the refinance process, reduce the cost of title insurance and lien processing, and even possibly reduce closing costs in states hardest hit by the mortgage crisis, including Nevada.
The economic and political impact of the new housing initiative is iffy in light of the high foreclosure rate and 13.4 percent unemployment rate in Nevada.
The state continues to lead the country in distressed property rates, according to RealtyTrac’s most recent U.S. Foreclosure Market Report. Additionally, Las Vegas has five times the foreclosure rate of the national average in metropolitan areas with populations of at least 200,000.
The housing issue will likely be an oft-used political football in Nevada between now and the November elections.
Republican presidential candidate Mitt Romney caused a stir last week when he suggested home foreclosures should be allowed to “hit the bottom” to help the housing industry recover.
In an interview published Tuesday ahead of the CNN presidential debate, Romney told Las Vegas Review Journal‘s editorial board he thinks the foreclosure crisis can best be ended by allowing banks to proceed against homeowners who have defaulted on their mortgages. New investors could then buy and rent out those homes until the market adjusted, he said.
“As to what to do for the housing industry specifically and are there things that you can do to encourage housing: One is, don’t try to stop the foreclosure process. Let it run its course and hit the bottom,” Romney said.
Democrats are criticizing Romney as being callous and out of touch with middle class Americans.
“Mitt Romney’s message to Nevada homeowners struggling to pay their mortgage bills is simple: You’re on your own, so step aside,” President Barack Obama’s reelection campaign spokesman, Ben LaBolt, said in a statement last week.
Sen. Harry Reid also chimed in. “Nevada has the highest foreclosure rate in America, and it has for almost three years. And here’s what Mitt Romney said: He would just let them hit rock bottom,” Reid said during a press conference in Washington D.C. “I don’t know what’s more graphic than that, in how we have different views of what the world should be like than our Republican friends.”
Obama is also expected to talk about his jobs initiatives when he speaks to a struggling East Las Vegas neighborhood this afternoon.
The president has been urging Congress to pass portions of the American Jobs Act, a $477 billion package of tax cuts and new federal spending aimed primarily at creating or saving public sector jobs.
Obama is also today holding a campaign fundraiser at Bellagio.
White House officials said Obama this week will be announcing a number of executive actions on the economy during a Western states tour that includes southern California and Colorado.
