Obama proposes home refinancing assistance program

President Barack Obama proposed a new home refinancing program in order to rejuvenate the housing market and the country’s economy, Bloomberg reported.

“This housing crisis struck right at the heart of what it means to be middle class in America: our homes,” Obama said during a speech in Falls Church, Virginia, Bloomberg reported. “We need to do everything in our power to repair the damage and make responsible families whole.”

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The plan would help borrowers who are current on their mortgages to refinance into lower-interest federally insured loans, the Wall Street Journal reported. It would also allow borrowers to qualify for the program even if they owe more money than their homes are actually worth, or if they can’t secure a new mortgage from a private lender. It would help some homeowners save $3,000 per year by tapping lower interest rates, the WSJ reported.

Read more at GlobalPost: Obama promotes new housing initiative

The plan, which was first mentioned by the president during the State of the Union address, will cost an estimated $5 billion to $10 billion. According to CNN, the president doesn’t plan to add to the deficit, but impose a fee on large banks. Congress has rejected trying to tax banks in the past and the proposal could have a tough time getting past it.

“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,” Obama said, The New York Times reported. “I refuse to accept that, and so do the American people.”

The proposal creates an even bigger divide between Obama and leading Republican opponent Mitt Romney, who said the nation’s housing market must hit rock bottom before homeowners can expect relief, The Times reported. It also reinforced the belief that Obama’s advisers foresee his opponent to be Romney.

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