The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

The Obama administration knows that broad action to strengthen the housing market could both help homeowners and improve his chances of reelection. Even though Congress has resisted further stimulus programs, a refinancing program could have a large impact without necessarily requiring Congressional action. As The New York Times reports:

One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent, according to two people briefed on the administration’s discussions who asked not to be identified because they were not allowed to talk about the information.

A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds.

It also would not tap any of the $45.6 billion in Troubled Asset Relief Funds that was set aside to help struggling homeowners. Only $22.9 billion of that pool has been spent or pledged so far, and fewer than 1.7 million loans have been modified under federal programs. But Andrea Risotto, a Treasury spokeswoman, said whatever was left would be used to reduce the federal deficit.

Additionally, the administration is working on a home rental program that would prevent a large number of foreclosed homes from flooding the market.

The government has encouraged limited refinancing already, but this proposal has the potential to create much more sweeping change. If the reports are true, Obama might have found a viable means to ease the housing crisis — one that could boost his chances of reelection next fall.

Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

Jeff Danziger lives in New York City. He is represented by CWS Syndicate and the Washington Post Writers Group. He is the recipient of the Herblock Prize and the Thomas Nast (Landau) Prize. He served in the US Army in Vietnam and was awarded the Bronze Star and the Air Medal. He has published eleven books of cartoons and one novel. Visit him at DanzigerCartoons.

Close