The White House is using an abbreviated headline that essentially asks, Why Promote Mortgage Refinancing?
In this installment of the White House White Board, Brian Deese, Deputy Director of the National Economic Council, explains how President Obama’s plan would make it much easier for millions of American homeowners to refinance their mortgage and save hundreds of dollars every month.
President Obama is urging Congress to take up his proposal to cut through the red tape that prevents so many homeowners from refinancing their mortgages and saving hundreds of dollars each month.
It has the potential to be a huge deal, so we want to make sure you have the facts — and get a chance to tell us what you think.
The site asked me if I had any questions after viewing the video. Here is my response:
Why aren’t banks competing to refinance homes already?
Why would banks want to compete to refinance underwater situations where such a loan would not meet the fiduciary standards of the bank?
Wouldn’t it make more sense for the federal government to deal directly with the home owner about the underwater part of the loan, and then let normal competition work on the safe part of the loan?
Why are we giving subsidies to the banks again? Why can’t we give the subsidies to the innocent instead of to the guilty?
Then they asked why I thought that this program was important. Here is my response to that:
It is important to fix the housing bubble collapse created by the banks. This is a necessary condition for getting the economy going again. Any fix that rewards the people who created the problem is absurd.
I have extracted a summary of positions from the Elizabeth Warren, Senator For Massachusetts, web site. From that document we have:
It has been more than three years since the greatest financial crisis in three generations. It is past time that we stop talking about accountability and start demanding it from those who broke the system.
A deregulated credit industry squeezed families harder, hawking dangerous mortgages, credit cards loaded with tricks and traps, and student loans that carried unexpected risks.
We have to take serious and hard steps to get this housing market to level out so that we can start rebuilding our economy. That’s true here in Massachusetts and around the country.
I think Elizabeth Warren would have a much better plan than this one from President Obama. This is why I think we need Elizabeth Warren in the Senate in Washington to help shape these policies to make better justice for the middle-class.