In a follow-up to remarks made in his State of the Union address last week, President Obama today in Falls Church, Va., elaborated on the administration's plan to extend help to homeowners with refinancing at lower interest rates, establishment of a homeowners bill of rights and coordinating an investigation mortgage origination and servicing abuses.
“This housing crisis struck right at the heart of what it means to be middle class in America: our homes,” Obama said [in prepared remarks] [...] “We need to do everything in our power to repair the damage and make responsible families whole.”
Included in the details:
• The Department of Justice is establishing a working group of at least 55 DOJ attorneys, analysts, agents and investigators from around the country who will join existing state and federal resources investigating similar misconduct under those authorities. The working group will also be co-chaired by New York Attorney General Schneiderman, who will lead the effort from the state level, and by senior DOJ officials.
• A refinancing plan will help "responsible borrowers" save an average of $3,000 per year. Borrowers who are current on their payments will be able to refinance to take advantage of low interest rates, cutting through the red tape that currently prevents this. The plan will be paid for by a bank financial fee on institutions with $50 billion or more in assets. (Congress has twice rejected such proposals in the past two years.)
• The Homeowner Bill of Rights will include: access to a simple mortgage disclosure form, so borrowers can better understand the loans they are seeking; full disclosure of fees and penalties; guidelines to prevent conflicts of interest; support to keep responsible families in their homes and out of foreclosure; and protection against inappropriate foreclosure, including right of appeal.
• Provide a full year of mortgage-payment forbearance for borrowers looking for work.
• $15 billion in federal funds to put construction workers on the job rehabilitating and refurbishing hundreds of thousands of vacant and foreclosed homes and businesses.