A new home refinance program was proposed during President Barack Obama‘s State of the Union address on Tuesday night that would impact borrowers with privately-held mortgages. The program was among many economic topics addressed in the speech, including income and tax equality, payroll tax cuts and the need for a united Congress.
Home Refinance Program to Lower Interest Rates
Last night, Obama addressed the union in a speech lasting slightly over one hour long. In it, he discussed a number of economic issues, including the need to help troubled homeowners get back on their feet.
His solution was to create a new home refinance program that would allow millions of borrowers with privately-held mortgages to refinance at historically-low interest rates that reportedly could save an average of $3,000 per year.
Many home refinance options that have been presented to homeowners in the past only helped those who had been issued loans by government-controlled mortgage giants Fannie Mae and Freddie Mac. This program, which would function as an expansion of the Home Affordable Refinance Program (HARP), would extend eligibility to more borrowers.
The plan would be paid for by a small fee on large banks, senior administration officials have announced, which could mean the program might face opposition and have a difficult time being passed in Congress.
State of the Union Asked for Economic Change
Refinancing for homeowners was one of numerous topics the president discussed during the State of the Union address. Some other topics he explored included:
- Payroll tax cuts: He reiterated the importance of Congress passing the payroll tax cuts extension, which is set to expire at the end of February.
- Income equality: In a separate portion of his speech, President Barack Obama discussed the need for workers to have the ability to earn and grow wealth at any income level to shrink the widening gap between the top earners and the rest of the nation.
- Tax reform: He also mentioned the inequality in Warren Buffet paying a lower tax rate than his secretary then called for a new tax code.
In his address, he also discussed his displeasure with lawmakers’ constant bickering when attempting to pass laws, calling for a united Congress that would work together to turn the country’s economy around.
Reception of his speech has been mixed as some applaud his unifying approach, while others feel his efforts are simply his campaign push as he begins rallying for the 2012 presidential election.