Simply Taking Executive Action
The simplest and most effective stimulus the Obama White House administration could provide the economy doesnít even require a congressional act. Simply by taking executive action could alter the rules to give underwater responsible homeowners refinance mortgage loans at the low interest rates we have today, curtailing the foreclosure tide that is hampering recovery efforts the U.S. and slamming California residents harder than all other states except for Nevada.
A recent rare bipartisan U.S. Senate contingent with Democrats which included Barbara Boxer from California, including Massachusetts, Georgia, and North Carolina Republicans urged president Obama to act. Compared to his bill for jobs which includes the well-known snowballís chances of surviving within the House, even if any part of it makes it through, which only will happen after endless hours of partisan political posturing. Creating new mortgage financing rule would create a nearly instant outcome.
There could be new hope for families now pondering over walking away from their homes, not that they canít continue to make the large payments however because there's not much financial sense to continue on. This would benefit Millions of borrowers. And it would provide a glimmer of hope to regions such as the California Central Valley which is overwhelmed with foreclosures, with the resulting effect of continued undermining of general home values and speeding up the already downward economic whirl.
Wall Street along with banks lit this economic disaster fuse, however housing is the market that has been the most devastated. Numerous business leaders feel the nation won't ever recover from the previous recession, in addition to avoiding another double-dip, until the housing market becomes stabilizes and the Obama administration has the power to do this.
This rule change would only help home-owners who have kept their mortgage payments current, and not in default. A large contingent of them now carry loans well in excess of 5 percent, although the current rates are less than 4 percent, which are at all-time lows. In the senators letter to top Obama administration officials, the senators remarked there are almost 19 million loans which are guaranteed by either Fannie Mae or Freddie Mac that would benefit from a nationwide refinance.
The difference could make as much a $2,000 per month to numerous families, Obama himself stated in his speech in front of Congress in September. This is money people would have to spend on consumer items and services, although more than just that, it could allow more families to remain in their existing homes and provide more stability to the economy.
In a collective way, the ongoing precedent makes it nearly impossible to instill confidence in any recovery or to stimulate any individual or business
expenditures, which is the very thing in reality that will fuel any type of recovery.
Oct 19, 2011