President Obama on Working Through the Mortgage Crisis

 10:00 A.M. EDT

THE PRESIDENT:  Well, thank you so much for taking time to join us.  We are here with a wonderful group of homeowners. 

And I think for so many people around this country, the essence of the American Dream is owning your own home, being able to have that piece of property that is yours, that allows you to raise your kids, that represents your single biggest investment. And obviously one of the triggers of the financial crisis and now the economic crisis that we've suffered is that because in some areas housing values got way overheated, in some cases you had a lack of regulation that allowed all sorts of complex financial instruments take advantage of homeowners.  We have seen a collapse in the housing market, a precipitous drop in values, and that led to a lot of the problems in the financial markets.

Here's the good news.  At the beginning of this administration we said we are -- we were going to tackle directly the problems that homeowners were experiencing and figure out ways in which we could provide them assistance in reducing their interest rates, modifying their loans so that they would be in a position to stay in their homes and reduce their monthly payments.  And around the table here you see some wonderful families who have taken advantage of what are now historically low mortgage rates, brought about in part by some extraordinary actions by the Federal Reserve, but also brought about by the housing plan that Tim Geithner and Shaun Donovan helped to design.

What you've seen now is rates are as low as they've been since 1971.  Three-quarters of the American people get their mortgages through a Fannie Mae-Freddie Mac qualified loan.  And as a consequence of us being able to reduce the interest rates that are available, we have now seen some extraordinary jumps in the rate of mortgage refinancings. 

And everybody here represents families who have saved hundreds of dollars a month, thousands of dollars a year in some cases, and that's money directly in their pocket.  More importantly, what it's allowed them to do is to consolidate their loans in some cases, reduce the length of their mortgages in other cases.  It has given them the kind of security and stability in their mortgage payments that a lot more people can take advantage of.

So the main message that we want to send today is, there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates.  That is money in their pocket.  And we estimate that the average family can get anywhere from $1,600 to $2,000 a year in savings by taking advantage of these various mortgage programs that have been put in place. 

We've already seen a substantial jump -- 88 percent increase in refinancings over the last month.  We've seen Fannie Mae refinance $77 billion of mortgages in March, which is their highest volume in one month since 2003.  And rates on 30-year mortgages have dropped to an all-time low of 4.78 percent.

So we are at a time where people can really take advantage of this.  And what we want to do is to send a message that if you are having problems with your mortgage, and even if you're not and you just want to save some money, you can go to MakingHomeAffordable.gov -- MakingHomeAffordable.gov -- and the way the web site is designed, you can plug in your information and immediately find out whether or not you are potentially eligible for one of these -- one of these mortgage refinancings.

Now, we are in the process of rolling out some additional phases to the program.  Everybody here represent responsible homeowners who made their payments, who have jobs and income that support their mortgages.  In some cases, people may have had difficulties because they lost a job, somebody in their family got sick, they may have missed some payments -- and in those cases we also want to be helpful and we are putting in place a loan modification program, working with banks, working with services, that will allow other folks who are closer to losing their home in a stronger position in the future.

So there are a range of different programs that are available for a range of different types of borrowers.  The main message we want to send today is, is that the programs that have been put in place can help responsible folks who have been making their payments, who are not looking for a handout, but this allows them make some changes that will leave money in their pockets and leave them more secure in their homes.

So we hope that everybody takes advantage of it.  Again, the web site is MakingHomeAffordable.gov -- is that right?  MakingHomeAffordable.gov -- so get on the web site, find out what's available.

Last point we want to make -- as people have become aware that the government is helping to promote refinancing, we're starting to see some scam artists out there who are contacting people saying, you can refinance your home, the government has got a program, we're ready to help -- oh, but by the way, first you've got to pay some money.  I just want everybody who is watching today to know that if somebody is asking you for money up front before they help you with your refinancing, it's probably a scam.

So take advantage of MakingHomeAffordable.gov and that will allow you to figure out exactly how to proceed on this in a way that's making you money, saving you money, as opposed to costing you money.

All right.  Thank you, everybody.

END          
10:05 A.M. EDT