Obama’s Plan Offers Hope, But More Must Be Done for Home Owners

Obama’s proposal to help home owners with mortgages underwater gives hope. But more needs to be done to turn housing — and the economy — around.

President Obama’s refinance program for home owners with mortgages underwater is getting a ton of media attention. It’s a great program if you’re a home owner whose house is worth less than your fixed-rate mortgage, but what about the remaining home owners suffering because of the housing crisis?

NATIONAL ASSOCIATION OF REALTORS® President Ron Phipps took advantage of the media’s interest in the refinance proposal yesterday to talk about the ways the administration and Congress are hurting home owners and what they could do to improve the housing market and the economy.

There are things Washington, D.C., has done to hurt home owners this year, like lowering the maximum loan amount you can get via Fannie Mae, Freddie Mac, and FHA, which makes it tougher to buy or sell a home.

There are things Washington has threatened to do to hurt home owners, like upping the required down payment for the best mortgage interest rates to 20% or tinkering with the way the tax code treats mortgage interest.

And there are things Washington isn’t doing that would greatly help, like removing restrictions on how many loans a middle-class real estate investor can have, or pushing Fannie Mae and Freddie Mac to focus on short sales instead of foreclosures, which drive down the value of neighboring homes.