Cardoza applauds Obama's new housing initiative, says will help Valley

02/01/2012 2:30 PM

02/01/2012 2:31 PM

WASHINGTON, D.C. – Today, Rep. Dennis Cardoza (D-CA) applauded President Obama’s new aggressive housing initiative. Like Cardoza’s HOME Act, the President’s new plan will allow responsible homeowners to refinance their mortgages at the current historically-low interest rates. “This plan is a monumental step toward bringing the housing market back from the brink,” Cardoza said in a news release. “It is simply the right thing to do as millions of homeowners across the country have been devastated by plummeting home values and an epidemic of foreclosures. Banks have so far failed to cooperate in stemming the housing crisis, and it will take a bold and sweeping initiative like the President’s plan to get us back on track.” The President’s plan allows any homeowner, as long as they are current on their payments, to refinance their mortgage at the current market rate. Many of these homeowners are locked in at rates approaching 9% and have been unable to refinance because the housing crisis has pushed their homes “under water,” owing more on their mortgages than their homes are worth. President Obama’s program will be administered by the Federal Housing Agency and is estimated to cost between $5 and $10 billion. The President has proposed a fee leveraged on banks and financial institutions to pay for the cost of the program. Cardoza introduced a nearly identical mortgage refinance plan in 2009, the Housing Opportunity and Mortgage Equity (HOME) Act. Like the President’s plan, it allows homeowners the opportunity to refinance their mortgages at the current market rate and lower their monthly payments. Refinancing would significantly lower the homeowner’s monthly mortgage payments, saving them money and stabilizing the housing market by preventing unnecessary foreclosures. Two experts that Congressman Cardoza consulted with when writing the HOME Act, economist and Senior Vice Dean of the Columbia University Business School Chris Mayer and economist Mark Zandi of Moody’s Analytics, have repeatedly advocated for a major housing refinancing push from the federal government. Like Congressman Cardoza, Mayer and Zandi argue that the depressed housing market is holding the economy back. “I couldn’t be more pleased with the actions the President has taken today,” said Congressman Cardoza. “In addition, I am also appreciative that the California Delegation has been steadfast in its commitment to help the troubled housing market. I look forward to working with all of my colleagues in the House and Senate to implement the President’s housing plan and bring homeowners the relief they desperately need.” Congressman Cardoza represents California’s Central Valley, which has been ground zero for the housing crisis. In some communities, over 53 percent of mortgages are underwater and over 70,000 people have lost their homes to foreclosure since the crisis began in 2007.

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