Obama, in Bid to Ease Home Buying, Cuts Mortgage Insurance Rate
By: Michael D. Shear (NY Times) January 2015
President Obama announced on Thursday new measures to try to assist a still-sluggish housing market, even as he hailed an economic recovery that he said was finally roaring ahead.
Speaking in Arizona, a state that was hit hard by the country’s mortgage crisis, Mr. Obama said his decision to lower insurance rates on federally issued mortgages would make purchasing a home cheaper for hundreds of thousands of people across the country.
“Hundreds of thousands of new buyers is going to mean a healthier housing market for everyone,” Mr. Obama told a small crowd of supporters in the Central High School gymnasium. “We do want to make sure that the housing market is strong and that responsible homeowners can get a good deal.”
The president said the changes would help improve an economy that was already on the rebound. He said the country had added jobs, lowered the cost of gas and insured more people since he came into office.
“Let there be no doubt. Thanks to the steps we took to rescue our economy, to rebuild it on a new foundation, America is coming back,” Mr. Obama added. “America’s resurgence is real.”
The president is hoping that the modest move on housing — it could produce savings of about $900 for each home buyer — will help address tighter lending that has made home loans harder to come by for many people, one of the lingering effects of the economic collapse in 2008.
Mr. Obama is also using the housing action to underscore what the White House says is a continuing effort to address financial concerns of the middle class. Officials said the housing announcement was the first in a series of “S.O.T.U. spoilers” that the president will reveal in a series of speeches leading up to the State of the Union address in front of Congress.
On Wednesday, the president was in Detroit talking about the recovery of the auto industry and the broader manufacturing sector. In a speech in Knoxville, Tenn., on Friday, Mr. Obama is expected to announce measures intended to make college more affordable.
The speech in Phoenix is a return to a state that was devastated by the nation’s mortgage and foreclosure crisis. In February 2009, barely a month into his presidency, Mr. Obama traveled to Mesa, Ariz., near Phoenix, to announce a plan to confront what he called “a crisis that strikes at the heart of the middle class.”
At the time, homes across Phoenix were dropping into foreclosure as the housing bubble burst nationally. In his 2009 remarks, Mr. Obama noted that “home values have fallen so sharply that even if you make a large down payment, the current value of your mortgage may still be higher than the current value of your house.”
He added, “So no bank will return your calls, and no sale will return your investment.”
Six years later, the president’s message was more upbeat. He said that the nation’s economic recovery had helped lift property values and that financial regulations put in place by his administration had helped bring stability to the banking system.
But he acknowledged that the housing market continued to be tough, especially for first-time home buyers. Finding a bank willing to offer a mortgage can be tricky he said, denying the American dream to many in the middle class. He said his new measures would help.
“It means fewer foreclosure signs, it means more construction, which means more jobs,” Mr. Obama said. “This is the kind of boost we need to keep the momentum we’ve seen, to keep it going.”
In Washington, Speaker John A. Boehner said the president was bragging about an “economy that we all know could be doing better.” And he criticized the president for not visiting the Veterans Affairs hospital in Phoenix that was at the heart of a scandal involving delayed care.
“The system is still broken, and needs to be fundamentally transformed in a way that puts the needs of veterans before the needs of the bureaucracy,” Mr. Boehner said. “We call on the president to offer a long-term vision for reforming the systemic problems at the V.A. We’ve yet to see it.”
