When President Obama took office, our housing market was in free-fall, leaving many families feeling trapped and anxious about their mortgages. The President took immediate action to stabilize our housing market and protect the middle class. These steps helped millions of middle class families stay in their homes, save money on their mortgages, and turn their communities around.
Working together we need to build a more durable and fair system that promotes the American Dream of homeownership, while preventing the nightmare of another crisis. Today, our housing market is coming back. Home values are rising, foreclosures are at the lowest levels since 2006, home sales have increased at double digit rates, and American families are on pace to purchase over 5 million homes this year. In part because of President Obama's tough regulations that cracked down on the most reckless practices from the housing crisis, responsible Americans can feel more confident and secure when they borrow money to purchase their own home. But the job is not done, and restoring security to homeownership is one of the President’s top economic priorities.
In today’s speech, the President laid out his ideas to help more responsible homeowners refinance, to cut red tape, to increase home values by fixing our broken immigration system, to help the hardest hit communities rebuild, and to ensure those who rent have decent and affordable options. The President also made it clear that going back to the same bubble-and-bust housing system that caused the financial crisis is not acceptable. We need a rock-solid foundation for financing homeownership with a bigger role for the private sector, where taxpayers aren’t on the hook for the irresponsible behavior or bad decisions of financial institutions and we finally put an end to an era where Fannie Mae and Freddie Mac could expect a bailout for risky behavior in pursuit of profits. These bipartisan solutions will help build on the progress we’ve made over the last four years, and together we can make owning a home a symbol of responsibility and a source of security for generations to come.
A Better Bargain for the Middle Class: Housing
A Better Bargain for Responsible, Middle Class Homeowners:
Core Principles for Durable, Fair Housing Finance (GSE) Reform:
Making Families’ Most Important Financial Decision Safe and Simple:
Confirming Mel Watt Will Provide Certainty and Leadership During This Key Phase:
A Better Bargain for Responsible, Middle Class Homeowners
There are several additional steps – including legislative proposals – that could immediately work to further strengthen the housing market and ensure that the middle class can secure affordable mortgages, refinance their loans at today’s low rates, and build housing wealth while ensuring that no communities or homeowners are left behind by the housing recovery.
These steps could help a typical family save $3,000 or more per year.
Core Principles for Durable, Fair Housing Finance (GSE) Reform
B. Intermediate Steps to Transition to a New Housing Finance System:While bi-partisan legislation will be critical to creating a new housing finance system, non-legislative steps can be taken now to facilitate a gradual transition to the new system and to facilitate the wind down of Fannie Mae and Freddie Mac, including:
Making Families’ Most Important Financial Decision Safe and Simple
For most middle class families, buying a home is the most important financial decision they will ever make. Unfortunately, in the lead-up to the foreclosure crisis, too many borrowers were steered into predatory or unsafe mortgages that they could not afford or understand – often a result of confusing mortgage forms, conflicts of interest in the lending process, hidden fees, and complex products. This is why President Obama took unprecedented steps to strengthen consumer protection and to ensure that mortgages are safe, sustainable and simple to understand.
The President fought for and signed into law the strongest consumer protections in history with the Dodd-Frank Act. The Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB) and tasked it with one job: to protect families when making financial decisions. The first-ever independent consumer watchdog, the CFPB protects middle class families by making it safer and simpler to apply for a mortgage and know that it is sustainable. To this end, the CFPB has done the following:
While these unprecedented consumer protections are making a big difference, more can be done to protect middle class families. That is why the President supports the CFPB in finalizing its simplified mortgage disclosure forms, is calling for improved rules that encourage lenders to care more about borrower success, and made clear that any future housing finance system must ensure a level playing field for community-based banks and financial institutions so borrowers can work with the lender that is right for them.
Confirming Mel Watt will Provide Certainty and Leadership during This Key Phase
The President’s Policies Helped Stabilize a Housing Market in Free Fall
When President Obama took office, our housing market was in free-fall. The President immediately took unprecedented steps to stabilize our housing market and protect the middle class, and later, when there was a log jam in Congress, the President took a number of significant administrative and enforcement actions that helped heal the housing market. While more work remains, the important actions by the President helped millions of families stay in their homes, save money on their mortgages, and turn their communities around.