Tonight, President Obama will deliver the first State of the Union address of his second term, and along with the expected comments on gun control, climate change and immigration, recent reporting by the Washington Post suggests that housing policy could play a key role in the president’s new domestic agenda.
As anyone who follows our site knows, the president has had a long, troubled history with the housing market, with his refinancing plans coming up woefully short of their original targets, all while negative equity continues to hinder housing’s progress.
Will Obama Address Housing?
That all could change, though, tonight. Recent actions by Obama, the Post wrote, suggest that Obama will announce new policies that rely more on his executive powers than on the legislative efforts of Congress to see policies through, and housing policy may fall under that emerging approach:
- The president’s plan, the Post reported, would involved Obama using his executive order to allow the nation’s 11 million underwater homeowners a better chance to refinance at today’s historically low interest rates.
- Though the government did expand its Home Affordable Refinance Program, or HARP, to great success last year, Obama’s new plan could extend HARP privileges to homeowners with privately-backed mortgages; currently, only homeowners with mortgages ensured by Fannie Mae or Freddie Mac were eligible for HARP.
- Naturally, the plan would target homeowners who are current on their mortgages but unable to refinance after housing values plummeted in the post-2007 housing market; according to the latest numbers by CoreLogic, home prices are down 26 percent from their 2006 peak.
Does This Plan Have Any Chance?
Obama’s approach does not necessarily come as a surprise; after all, Michael A. Stegman, a senior Treasury Department official, said in January that the Obama White House was pursuing “non-legislative means at our disposal to help responsible . . .homeowners access these low rates,” though he did add, “the legislative route would be preferable.”
However, we’ve been down this road before, of new legislation/policies being introduced to aid homeowners; in fact, a bill to expand HARP has been resuscitated numerous times in the Senate to no avail.
Could the president’s new plan be different? We’ll have to tune in tonight to find out.