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This is MORNING EDITION from NPR News. I'm Ari Shapiro.

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And I'm Renee Montagne. President Obama yesterday unveiled a plan to let a million or more American homeowners save money on their mortgages, even if those loans are underwater. Faced with partisan gridlock in Congress, White House officials say the president will announce a series of steps to boost the economy, steps he can take without congressional approval. NPR's Chris Arnold reports.

CHRIS ARNOLD, BYLINE: The president spoke on the front steps of a home in Las Vegas to address an issue that's been frustrating many American homeowners. They see other people refinancing at today's super-low interest rates, down, say, around four percent for a 30-year fixed rate loan, but because of falling house prices, they can't qualify.

PRESIDENT BARACK OBAMA: There are still millions of Americans who have worked hard and acted responsibly, paying their mortgage payments on time, but now that their homes are worth less than they owe on their mortgage, they're having trouble getting refinancing even though mortgage rates are at record lows.

ARNOLD: If they could refinance, many people could save a lot of money. And yesterday the president said he wants to let more Americans put that extra money in their pockets.

OBAMA: So let me just give you an example. If you've got a $250,000 mortgage at six percent interest rates, but the value of your home has fallen below $200,000, right now you can't refinance - you're ineligible. But that's going to change. If you meet certain requirements you will have the chance to refinance at lower rates.

ARNOLD: The biggest requirement is that you have a loan that's backed by Fannie Mae and Freddie Mac - the giant government-sponsored mortgage firms. The loan had to be made prior to June of 2009, and you have to be paying your mortgage. Tens of millions of Americans, though, fall into that category. And the president says something he can do right now is to help more of them to refinance.

OBAMA: Which could save you hundreds of dollars a month and thousands of dollars a year on mortgage payments.

ARNOLD: This refinance plan is not a new idea, though. A pair of economists at Columbia University, Chris Mayer and Glenn Hubbard, for years now have been proposing a refinancing plan that sounds very much like this to help the economy. They've been speaking on NPR and publishing op-ed pieces in the major newspapers, speaking at congressional hearings. And now with the president himself announcing the plan, it certainly sounds like the day has come when their proposal is becoming a reality. Chris Mayer.

CHRIS MAYER: I think the day is a lot closer. This has finally spurred some real action, I hope. But the devil is in the details.

ARNOLD: And Mayer says the final details won't be announced until mid-November.

MAYER: There's going to be a lot in the next three weeks that has to happen for this program to go right. It could easily go right but it could easily go off the tracks too if we don't get the details correct.

ARNOLD: Mayer hopes the administration, Fannie Mae and Freddie Mac, and the banks will swing for the fences on this. An existing government re-fi program has reached fewer than one million people. The Federal Housing Finance Agency estimates that this new effort might double that – so, say, two million people. But Mayer says many times more Americans really should qualify.

MAYER: You could easily see 15 to 20 million mortgages refinanced under this program if this were aggressively pushed by the lending community.

ARNOLD: But that's a big if. The central question in all this is whether this program can be done in a way that makes big mortgage lenders want to actually do these refinancings. Without that, this effort is going to be pretty small potatoes. But if it does work on a large scale, the administration says homeowners on average could save $2,500 a year. So Mayer says that means...

MAYER: That's about $50 billion a year. Those kinds of numbers, 50 billion a year of savings, is like a permanent tax cut for a lot of middle class households.

ARNOLD: And while the Obama administration has thrown its weight behind this plan, at least some Republicans support it too. Mayer's fellow economist at Columbia, Glen Hubbard, was an advisor in the George W. Bush White House and he now heads up presidential candidate Mitt Romney's economic team.

GLENN HUBBARD: It looks like a good plan. I'm glad they're doing it.

ARNOLD: Hubbard also, though, has all the same devil-is-in the details qualifiers about whether it will actually work on a large scale. Critics of the plan say that it might not cost taxpayers money, but they say that it would cost investors money. Some of those include bond funds, pension funds, banks and various other investors around the world. Some who own mortgages where homeowners are paying seven percent would make less money if those homeowners refinanced into four percent loans. Chris Arnold, NPR News.

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