WASHINGTON -- President Obama in Las Vegas Monday announced he is broadening a federal aid program to allow more homeowners "underwater" on their mortgages to refinance at today's low interest rates.
Among other things, the major change would qualify borrowers to take advantage of refinancing no matter how far the value of their homes have fallen, as long as they are current on their mortgages, officials said.
Previously, refinancing aid was available to homeowners owing no more than 125 percent of their property's value. The problem in places like Nevada, California and Florida, where the mortgage crisis has hit hardest, is that housing values have fallen much farther.
The overhaul of the underused, 2-year-old Home Affordable Refinance Program, or HARP, also would reduce the number of homeowners required to pay for appraisals during the refinance process, and reduce the cost of title insurance and lien processing among other closing items.
Further, administration officials said the Treasury Department is reviewing its "hardest hit" fund to see if closing costs could be reduced further states most impacted by the mortgage crisis, including Nevada.
"We have far too many Americans who have done all the right things. They pay their bills, but are still stuck with 6 percent-7 percent mortgages," said Shaun Donovan, secretary of Housing and Urban Development. "The program we had designed has helped homeowners ... but it has not reached the scale we had hoped or the scale it needs to reach to help families and the economy even further."
Only mortgages held by the federally backed Fannie Mae and Freddie Mac would be eligible for assistance. That could limit its effectiveness in Nevada, according to Rep. Joe Heck, R-Nev., because "there aren't that many loans in Nevada that are Fannie or Freddie held."
Nonetheless, Heck said in a call with reporters that he favored broadening the refinancing option to homeowners who are more deeply underwater, and planned to support the Obama initiative as an effort to dent Nevada foreclosures.
Neither Heck nor the Federal Housing Finance Agency had up-to-date numbers at hand on the inventory of Nevada mortgages held by the government-supported enterprises. As of September 2010, Clark County assessor records showed Fannie Mae owned 3,661 properties in Southern Nevada and Fraddie Mac owned 1,098 properties.
Statewide, Fannie and Freddie owned a combined $54 billion in mortgage loans, and $9 billion of those loans were delinquent, according to agency reports as of June 30, 2010. The enterprises had a $749 million inventory of foreclosures in Nevada as of that date.
Sen. Harry Reid, D-Nev., praised Obama while taking a shot at Republican presidential candidate Mitt Romney, who said last week that foreclosures should be allowed to run their course in a free-market response to the mortgage crisis.
"Instead of telling Nevada homeowners they're on their own, President Obama is showing real leadership by taking action to help keep thousands of Nevada families in their homes," Reid said.
Talking with reporters Monday morning, Donovan said the benefit to a homeowner from the modified mortgage assistance program would amount to about $2,500 annually. He was reluctant to estimate how many people might take advantage of the opportunity.
"Lowering payments by $2,500 or more each year is something that will help more homeowners stay in their homes," Donovan maintained. "It will lower the number of foreclosures because we are lowering payments for folks who at some point may not be able to cover those (higher) payments."
White House officials say Obama will be talking housing and jobs when he meets with families in a Las Vegas neighborhood at the eastern edge of the valley. The location has not been publicized in advance for security reasons.
The president also is the main attraction at a midday fundraiser at the Bellagio, his first effort to tap Southern Nevada for re-election cash.
To "welcome" Obama to Southern Nevada, the National Republican Senatorial Committee released an Internet video attacking Obama's "disastrous failed policies" that it said contributed to the region's slumping economy. The video's extended targets are Sen. Harry Reid and Rep. Shelley Berkley, the state's top Democrats.
Republican National Committee chairman Reince Priebus said Obama in Las Vegas "is there today to tout various policies that failed to create jobs the first time around," a reference to the 2009 federal stimulus program.
"This is nothing but a rehash of the same failed policies he shoved down the throat of Americans a year and a half ago," he said.
Administration officials acknowledged the new housing initiative on its own may lack the broader impact in an economy facing 9 percent unemployment nationally and 13.4 percent in Nevada.
That's why, they said, Obama also Monda will be renewing his pitch for Congress to pass his American Jobs Act, the $477 billion package of tax cuts, retraining initiatives and fresh spending intended to create jobs and give people more money in their pockets to spend and pick up the economy.
"You cannot be for improving our housing market without being for a major push to increase demand and increased jobs over the next 12 to 18 months," domestic policy adviser Gene Sperling said. "You cannot be for one without the other."
White House Press Secretary Jay Carney said Obama also was in Las Vegas to highlight "Project Rebuild," a component of his jobs act that would create a $15 billion fund for construction companies to rehab vacant lots and foreclosed homes fallen into disrepair.
Officials said Obama will be announcing this week a series of executive actions on the economy during a Western swing that also will take him to Los Angeles, San Francisco and Denver.
The actions, which he can put into effect without needing approval from Congress, will be coupled with a new slogan, "We can't wait" -- as in "we can't wait" to fix the economy.
Republicans wasted no time to begin mocking the new moniker, taking to Twitter to denounce it, using the hashtag #wecantwait.
Contact Stephens Washington Bureau Chief Steve Tetreault at firstname.lastname@example.org or 202-783-1760.