Nearly 11 million Americans are underwater on their mortgage, meaning they owe more to the bank than their homes are worth. In fact, homeowners have lost $7 trillion in home equity--the difference between the actual value of a home and the balance of what's owed on the mortgage--since the peak of the housing bubble in 2005. This loss in home equity is devastating for a family’s financial security, and makes it more difficult to take out other loans, save for a bigger house, or build a nest egg for retirement. It also means families are making payments that are higher than they would be if their mortgage was based on the actual current value of their home, giving them fewer dollars to spend on other economy-bolstering goods and services.
We can’t wait any longer to help Americans struggling to make their mortgage payments.
Today, President Obama traveled to Las Vegas to announce that the Federal Housing Finance Agency is expanding eligibility for the Home Affordable Refinancing Program. The changes will help responsible borrowers with little to no equity in their homes take advantage of today’s historically low interest rates to refinance their mortgages.
These new steps will save underwater homeowners thousands of dollars each year, and they didn’t take an act of Congress. This executive action will not only save homeowners hundreds of dollars each month, it will put pressure on Congressional Republicans to put country before party and pass the American Jobs Act. The President believes we can’t wait, so he will act where they won’t.
Today’s announcement isn’t a substitute for the bold actions we need to grow the economy, and President Obama knows this. The situation is too serious to not move forward. That’s why he’s pursuing executive actions like this one while continuing to work toward passing the American Jobs Act. The legislation will help keep teachers in the classroom and first responders on the job, invest $50 billion in our nation’s infrastructure, and create tax breaks for small businesses. It also includes Project Rebuild, which helps the private sector put construction workers to work rehabilitating vacant or abandoned homes and business across the country, helping stabilize home prices everywhere. Most importantly, the American Jobs Act will create the jobs we need to improve our economy and help middle class families.