Obama Outlines Fresh Mortgage Refinancing Plan

President Obama is trying again to revive the nation's housing market. Past efforts have come up short, and this one faces long odds in Congress. On Wednesday, he outlined a program designed to make it easier for homeowners to refinance into cheaper mortgages.

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STEVE INSKEEP, HOST:

It's MORNING EDITION, from NPR News. I'm Steve Inskeep.

RENEE MONTAGNE, HOST:

And I'm Renee Montagne. The excruciatingly slow recovery of the real estate market remains at the heart of today's economic trouble. And so we'll talk this morning about yet another effort to help homeowners. President Obama is proposing to help homeowners refinance at lower rates, saving thousands of dollars, but previous efforts fell short. NPR's Scott Horsley has more.

SCOTT HORSLEY, BYLINE: Of all the economic problems he's tried to tackle over the last three years, President Obama calls housing the most stubborn.

(SOUNDBITE OF SPEECH)

PRESIDENT BARACK OBAMA: It has been the single-biggest drag on our recovery from a terrible recession.

HORSLEY: Even though mortgage rates are at near-record lows, millions of borrowers remain trapped in more expensive loans. And Mr. Obama concedes his efforts to remedy that have done little good so far.

(SOUNDBITE OF SPEECH)

OBAMA: I'll be honest. The programs that we've put forward haven't worked at the scale that we hoped.

HORSLEY: Yesterday, the White House rolled out the latest wrinkle in its plan. It would allow all borrowers who are current on their loans to refinance through the Federal Housing Administration, even if they owe more than their homes are worth. Chris Mayer of Columbia Business School says it's a no-brainer for the government to do that with loans backed by Fannie Mae and Freddie Mac, since taxpayers are already on the hook for those loans, and lowering the payments would reduce the risk of default. But Mayer's more skeptical about having Washington push to refinance loans that don't already carry a government guarantee.

CHRIS MAYER: Taxpayers should have some questions about: Does it really make sense for them to take on that additional risk?

HORSLEY: The White House proposed covering the cost of its five-to-10-billion-dollar plan with a tax on big banks. But there's little sign lawmakers will go along with that. In the end, this may be just one more opportunity for Mr. Obama to show he's trying to help, while campaigning against a do-nothing Congress. Still, the administration sees some hope for legislative action. As one advisor said, Republican homeowners want lower mortgage payments, too. Scott Horsley, NPR News, the White House.

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