As we all know, President Obama recently made his first State of the Union speech after his re-election. The history of this annual speech goes all the way back to George Washington who delivered the first annual message before the Congress. This speech gives an insight to the agenda of the President and his cabinet for the following months. Lets see what the President had to say about the housing market.
The President plans to relax the lending structure to include buyers with stable yet lower income bracket. His address included a “proposal to extend refinancing to a wider section of homeowners, giving the economy a boost.” There was a mention of plans to relax the restrictions on mortgage lending and refinancing. The situation now is that only people with “impeccable credit are granted loans or refinancing”. But now that the housing market is more stable than it was a few years ago, the president thinks it is time to relax things a bit, to accommodate the not so rich, ordinary folks who also want to buy a home.
A relaxation on mortgage restrictions should come about soon because, “…with mortgage rates near a 50-year low, too many families with solid credit who want to buy a home are being rejected. Too many families who have never missed a payment and want to refinance are being told no. That’s holding our entire economy back, and we need to fix it.” An increase in home buying will also mean an increase in employment, for construction workers and other service providers.
The president’s solution for the situation is “a bill that would extend re-financing to homeowners with privately financed underwater loans. (Homeowners with government-backed loans already have refinancing opportunities, thanks to executive action taken last year.)” Let’s hope that these policies and plans are set into motion soon, so that we see an improvement in the housing industry and in the national economy.