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home : latest news : world April 16, 2014

8/6/2013 2:01:00 PM
In Phoenix, Obama pitches mortgage overhaul as housing rallies
The Associated Press
President Barack Obama speaks, Tuesday, in Phoenix. Obama was in Arizona to discuss the economy and the middle class and then to California to tape an appearance on “The Tonight Show with Jay Leno.” Below, Obama waves as he leaves the stage at Desert Vista High School in Phoenix.
The Associated Press
President Barack Obama speaks, Tuesday, in Phoenix. Obama was in Arizona to discuss the economy and the middle class and then to California to tape an appearance on “The Tonight Show with Jay Leno.” Below, Obama waves as he leaves the stage at Desert Vista High School in Phoenix.
Julie Pace
The Associated Press

PHOENIX - Buoyed by an improving housing market, President Barack Obama on Tuesday proposed a broad overhaul of the nation's mortgage finance system, including winding down government-backed Fannie Mae and Freddie Mac. He declared that taxpayers should never again be left "holding the bag" for the mortgage giants' bad bets.

Obama outlined his proposals in Phoenix, the once foreclosure-riddled city at the epicenter of the nation's housing crisis. The housing market in Phoenix, as well as in many other parts of the country, has rebounded robustly, with prices in the southwestern city up 66 percent from the low point in 2011.

Despite the nationwide gains, the president said sweeping housing reforms are still needed to ensure that a rejuvenated market doesn't simply "re-inflate the housing bubble." The cornerstone of that effort is winding down Fannie Mae and Freddie Mac, a proposal with bipartisan support in the Senate.

"For too long, these companies were allowed to make big profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag," Obama told a crowd of more than 2,000 at an area high school. He spoke following a tour of a construction company that has been able to hire hundreds of new workers as a result of the region's housing comeback.

While the president has previously endorsed overhauling Fannie and Freddie, his remarks Tuesday marked the first time he outlined his specific priorities for doing so.

The president wants to replace Fannie and Freddie with a system that would put the private sector, not the government, primarily at risk for loans. The government would still be involved, both in oversight and as a last-resort loan guarantor.

Obama is also seeking guarantees that a private sector-led mortgage finance system would still ensure wide homeowner access to popular 30-year mortgages at fixed rates.

Making light of criticism from Republicans who have cast him as a big-spending liberal, Obama joked that his calls for deeper private sector involvement "must sound confusing to the folks who call me a socialist."

Obama's mortgage reform priorities are largely in line with a Senate measure shepherded by Republican Sen. Bob Corker of Tennessee and Democratic Sen. Mark Warner of Virginia. That legislation would wind down Fannie Mae and Freddie Mac within five years.

Once flourishing, Fannie and Freddie were bailed out in 2008 by a $187 billion taxpayer-backed bailout. The two enterprises don't make loans directly, but buy mortgages from lenders, package them as bonds, guarantee them against default and sell them to investors. The enterprises currently own or guarantee half of all U.S. mortgages and back nearly 90 percent of new ones.

Obama's trip to Phoenix marked the latest stop on a summertime tour aimed at rallying the public around his economic policies ahead of looming budget fights with congressional Republicans this fall. It was also a return to the city he visited just weeks after taking office in 2009 to tout the government's role in bolstering the housing market.

But some of Obama's housing proposals remain stalled in Congress, including sweeping refinancing legislation that would expand eligibility for homeowners who do not have government-backed mortgages. On Tuesday, he reiterated his calls for lawmakers to pass his refinancing proposals, saying they would help homeowners save thousands of dollars a year.

The president also tried to link his housing proposals to immigration reform, his top second-term legislative priority. He argued that legal immigration would allow more people to purchase homes, thereby raising home values. White House officials also cited a study that showed immigrants accounted for 40 percent of new homeowners nationwide between 2000 and 2010.

The nationwide housing recovery has been providing critical support to the economy at a time when manufacturing and business investment have stagnated. Steady job growth and low mortgage rates in the past year have also fueled more home sales. The increased demand, along with a tight supply of homes for sale, has pushed home prices higher and encouraged builders to start more homes and create more construction jobs.

Seeking to highlight the broad impact of the housing market, Obama opened his stop in Phoenix with a tour of Erickson Construction, a company that makes building frames for homebuilders in three western states. The White House said the company's workforce has expanded from less than 100 employees at the depths of the recession to more than 580.

Just two years ago, the region was in the throes of the worst housing collapse in the country, with prices down nearly 60 percent from their June 2006 peak and banks foreclosing on 70,000 homeowners a year. While the current median home price remains below peak, the levels have risen 66 percent from September 2011. Buyers are plentiful and homes for sale scarce, leading to bidding wars for resale homes.

At the high school in Phoenix, students in the audience interrupted Obama with a rendition of "Happy Birthday;" the president turned 52 on Sunday.

"I'm now 52, and Michelle says I don't look a day over 51," Obama quipped.

Related Stories:
• Editorial: Housing market up despite the feds

Reader Comments

Posted: Friday, August 09, 2013
Article comment by: John Rambo

Governor Brewer stated the truth that obama took credit for Arizona's housing and economic recovery!
"The credit belongs to all us hard working Arizonan's", she stated. I agree!
You don't have to be a psychologist to see that obama feeds people phony hope and tales to evoke hope.
In actuality, obama evokes fear, conflict, and division. This is why people are fearful, conflicted, and divided in America like never before!
Why are some fooled by this guy, this late in the game, simple, he's an excellent motivational speaker and simple minds fool easily.
Is anyone in denial that this president has created a national debt that we will never pull out of as a nation without severe damaging consequences? I challenge anyone to dispute this fact! We, as a nation cannot afford to even pay the interest off! Many economist say the results of this debt will really start having an impact to America by summer of 2014. The federal government is already changing the dollar bill to a heavy, clunky coin with "in God we trust" removed from the coin. Its beginning America!

Posted: Thursday, August 08, 2013
Article comment by: Had you taken a course in logic and semantics

@Healing nicely: the new FAIL

Denial of the antecedent. The economy did not start the day the President took office.

Everything is healing nicely.

Posted: Thursday, August 08, 2013
Article comment by: Blame everybody but B. Hussein O

So what have we learned from the low information Obama supporters? It is Bush's fault, it is Fox News' fault, it's the Banks' fault, it's the mortgage companies', and now it is our fault. But NONE of it is Obama's fault. Good grief...

Posted: Thursday, August 08, 2013
Article comment by: Hooty Hoo

A friend tried to refinance his upside down mortgage using HAMP or HARP. He submitted his documents 10 DIFFERENT TIMES OVER 2 YEARS. Nothing was ever done. He said it was a bureaurocratic disaster like no other. He mailed in the keys to the bank and is living in a better place for less money. He has plenty of money to retire on. He'll never need to buy a home again.

Posted: Thursday, August 08, 2013
Article comment by: Making Money

Don't blame the economy on Obama. You all know full well that he was handed a train wreck from the the start.

I, personally, am better off now than I ever was, and I have made more money in both career and investing under this administration than any before.

If you are not better off, you had better look in the mirror and figure out what YOU did wrong. You borrowed too much, you bought more house than you can afford, you spend too much, or you are in the wrong line of work. Learn to adapt to whatever the situation is instead of pigeon holing yourself and hoping the world aligns with you.

And don't forget to teach your kids this too!

Posted: Thursday, August 08, 2013
Article comment by: Healing nicely: the new FAIL

Healing nicely?? If by "healing" you mean the country is monumentally failing under B. Hussein O's lack of leadership?

To the low information voter who claims things are healing nicely:
No "things are NOT healing nicely, in fact just the opposite.
Here are the facts:
Unemployment: perpetually stuck at 8%
Food stamp president: Record number of folks using food stamps.
Inflation: huge gap from the rise in cost of basic life necessities and income.
National debt: skyrocketed up six trillion dollars in B. Hussein O's first term alone.
Economic growth: has barely cracked 2% since he’s been in office.
Health care costs: Obamacare is causing double digit rise in health care premiums, and it's barely begun..

Nothing is healing and people know that.

Posted: Thursday, August 08, 2013
Article comment by: Chris Foster

There are two types of people out there - those who think and those who watch Fox News. Discussion with .the latter is pointless.

Posted: Thursday, August 08, 2013
Article comment by: @ Still Blaming Bush

It's called denial of the antecedent. You can't act as if history was born with President Obama. Context is everything.

And Everything is Healing Nicely.

Except for the domestic folks who want to tear down the American government and the economy with it. You right-wingers are so confused by the barrage of false propaganda that you actually think our government is our enemy.

Posted: Wednesday, August 07, 2013
Article comment by: LIBERALISM Is what our Forefathers Hated!!!

Liberalism - It's a Mental Illness!!!

Posted: Wednesday, August 07, 2013
Article comment by: Hooty Hoo

This "rally" was the result of the housing market bottoming out. There was no place to go but up. And because houses were never really worth what they were priced at during the peak they probably won't ever get that high again. If they do the bubble will burst again because people will SELL FAST (and rent) if that ever happens. The government had zero to do with it. In fact they caused a lot of it and partly on Obama's watch. He does give a great speech.

Posted: Wednesday, August 07, 2013
Article comment by: Still Blaming Bush

Unbelievable. Five years into the worst president ever's administration, and some people are still blaming Bush for this president's failures?? Reminder: A liberal progressive Democrat is in power, not George W. Bush. There are children walking, talking, and going to school since Bush was in office, and somehow he's to blame for Obama's failures?? I purchased my home prior to Bush by the way.

Posted: Wednesday, August 07, 2013
Article comment by: 12%+ Rally

Housing is up in the Prescott market about 12% or so over the last 12 months. I'd call that a rally.

How many of you people that are griping about home values purchased them while Bush was still in office?

Your memories are short, but the momentum of the economy was certainly not in our favor when Obama was elected and took office.

Like it or not, Obama was at the helm when the economy stabilized and is now in recovery mode. Things still aren't great, but considering the dumpster fire of an economy that he inherited, not too shabby.

I voted for him twice, as did the majority of the country, and I am glad I did.

Posted: Wednesday, August 07, 2013
Article comment by: Tom Bowden

My house has "rallied" to be worth 100K less than I paid for it. Liberal economics at work, facts are ignored as fantasies are sold to the faithful. "An Observation" has pegged it.

Posted: Wednesday, August 07, 2013
Article comment by: Ralph Kyner

I don't are for this president. As far as the real estate market goes, I'll go with Craig Arps comment. Gov't is either in or out, not sorta' kinda'. And as far as that goes. Government has NO PLACE in private business. Let the Government tax and regulate all they want, But stay out of the Private sector. EVEN if it means Big Banks (too big to fail) are going belly up. Let them. Thats the mark of a true capitalist society. Also, the housing bubble. I think it's everyone's fault. The borrowers who were too quick and greedy to live beyond their means and the banks for being too quick and greedy to help them out.

Posted: Wednesday, August 07, 2013
Article comment by: Carl Imparel

The absolute worst president since Jimmy Carter...history will not be kind to him

Posted: Wednesday, August 07, 2013
Article comment by: Mike Bates

I voted for him twice, and I'm satisfied with his performance, though I wish he'd lean a little more to the left. I'm happy to see that the Tea Party racists showed up at the speech to demonstrate, yet again, why Arizona has become the laughing stock of the nation.

Posted: Wednesday, August 07, 2013
Article comment by: An Observation

I'm truly amazed that, at this point, anyone believes a single word that comes out of this guy's mouth. PT Barnum is proved right again.

Posted: Wednesday, August 07, 2013
Article comment by: Worst President Ever.

Only the state-run media (associated Press) could report this as a housing "rally." Really? A "rally." Then why is our home value STILL less than it was prior to 2008?? If he was doing something to fix the mess Liberal Democrats caused (See Community Reinvestment Act), then home values would be at 2013 values and NOT where they are now.

I did NOT vote for this guy, yet I'm still stuck with all his middle-class killing policies:
High unemployment, a million lost jobs, Obamacare already decemating the health care industry and causing double digit rise in health care premiums, Tax payer funded green energy companies going bankrupt, record deficit spending, Benghazi, IRS, NSA, Fast and Furious scandels...

Worst President ever.

Posted: Wednesday, August 07, 2013
Article comment by: Hooty Hoo

Obama will be remembered as "The Darling of Wall Street". When he says (with a straight face) "A home is the ultimate evidence that here in America, hard work pays off" he means the American dream is to borrow a few hundred grand from a bank, and chain yourself to your location until you get out from under the debt. Isn't America great?

Posted: Wednesday, August 07, 2013
Article comment by: Tongue-in-Cheek .

I swear if this guy worked at 31 Flavors in Phoenix in the middle of summer, he could sell ice cream cones with 10 dips piled on them and once he handed you the cone and it started to melt, THAT'S YOUR PROBLEM.

Posted: Wednesday, August 07, 2013
Article comment by: Really .

@ Blah Blah Blah:
I did, and I still don't regret my vote. You got anything else to say, Bubba?

Posted: Wednesday, August 07, 2013
Article comment by: Beachbum Bill

The republican house needs to "re-vamp" a popular line from a song in the 60's by a group that sung songs about surfing, girls and cars. It can be directed at our commander-in-chief:

"Try a bill, try a bill, buddy gonna' shut you down"

Compliments go out to the republican house for listening to our fore fathers that made America the great country it is.

Keep up the good work!

Posted: Wednesday, August 07, 2013
Article comment by: An American

So once again the government wants to stick its nose into private enterprises. Home ownership, just as higher education, and healthcare are not rights! They are not the job of the government either. Why is it that I should be fined to provide theses services to others when it's all I can do to provide them for my own family?
Is it right that I won't have enough income left to provide for my own, just so others can have what they can't earn on their own? I do wish someone could tell me just what portion of my income do you feel you are entitled to? Please tell me?

Posted: Wednesday, August 07, 2013
Article comment by: Everything is healing nicely

Now here is a proposal to change the Fanny and Freddy that Republican could love. (Estimated to be responsible for 11 to 17 percent of the toxic securities. Throw Countywide in there too.)

Too bad that President Obama proposes a Republican Idea, it will be shown again and by its rejection, that Republicans stand for nothing but whatever it takes for those corporate and billionaire campaign bucks to roll in, and some racism (birther-ism) on the side. Just obstruct the government, hastening the chance of slowing the recovery and in frustration, the corporatist might get get back in power, and trash the US economy, again.

Here's an idea, give him everything he wants and then you can call it a failure, if it is. I won't and that is why the obstruction.

Posted: Wednesday, August 07, 2013
Article comment by: J K

@ blah blah. Add me to the list that voted for him. Actually more people voted for him than the guy you voted for. You republicans should apologize to Obama and all of us who voted for him because of the mess you left him with when he was sworn in. Then you should apologize for all the obstructionist tactics you have employed in your attempt to destroy America for political gain. And now you should be apologizing for failing to recognize how much better off we are than when he took office but instead you create fake controversies in an attempt to obfuscate. And you should be thanking those of us who worked to get him elected. And as a way of showing your gratitude,
I will gladly accept your promise to either vote for Hillary or not vote in 2016

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