By Jim Droz
President Obama recently introduced a mortgage refinance plan in an attempt to shake things loose in a housing market showing signs of recovery. But as is typical with politics these days, the only thing he shook up was rhetoric and posturing.
California Democratic Congresswoman Zoe Lofgren says some ideas are “quite good,” but “unfortunately a large portion of it would require legislation, and we have seen that the Republicans … are unwilling to pass legislation.”
Countered California Republican Congressman John Campbell: “Like many things that are happening right now, particularly from the president, this is a campaign-oriented proposal and not something that is intended to actually ever become law.”
So can it become law? Should it? Are any of the proposals worth giving a chance, or are the problems too deep, cumbersome and volatile?
According to a White House press release, some of the plan’s key proposals include:
Broad-based refinancing to help responsible borrowers: The plan would provide borrowers who are current on their payments with an opportunity to refinance, cut through the red tape and perhaps save up to $3,000 a year. Sometimes homeowners with good credit and clean payment histories have reported being rejected because their mortgages are underwater.
Homeowner Bill of Rights: This would be a single set of standards to make sure borrowers and lenders play by the same rules, including access to a simple mortgage disclosure form, full disclosure of fees and penalties, guidelines to prevent conflicts of interest and protection for families against inappropriate foreclosure.