First Posted: 02/ 1/2012 4:25 pm Updated: 02/ 2/2012 9:14 am
WASHINGTON -- House Speaker John Boehner thinks it's about time for the government to stop trying to aid people with underwater mortgages.
Responding to a plan President Barack Obama unveiled Wednesday to help homeowners refinance, Boehner scoffed at the idea and then suggested government should get out of the way of increasing foreclosures and falling prices.
"One more time? We've done this. We've done this at least four times where there's a new government program to help homeowners who have trouble with their mortgages," the Ohio Republican told reporters on Capitol Hill.
"None of these programs have worked. I don't know why anyone would think that this next idea is going to work," Boehner continued. "All it does is delay the clearing of the market. As soon as the market clears and we understand where the prices really are -- [that] will be the most important thing we can do in order to improve home values around the country."
Obama's plan would require legislation from Congress to permit the Federal Housing Administration to help certain homeowners -- specifically, those who are underwater but current in their payments and whose loans are not held by the FHA, Fannie Mae or Freddie Mac -- to obtain new loans at better interest rates, saving $3,000 a year on average. A similar plan already aids people whose mortgages are held by one of those government-backed entities, but other homeowners usually cannot get a bank to refinance their loans.
While the administration's loan modification effort so far have fallen far short of its goals -- reaching fewer than 1 million homeowners when it aimed for 4 million with the last initiative -- Shaun Donovan, secretary of housing and urban development, argued Wednesday that doing more is vital.
"Economists on all sides of the political spectrum have recognized that a broad-scale refinancing effort is one of the most important things that we can do, not only for families and for the housing market, but also for the economy more broadly," Donovan said at a White House briefing.
"There's no question, if you look at the fundamental economics in the housing market, by all standard measures we've reached a level of prices that is supported by the fundamental economics," Donovan said. "And so the great risk here for families, for neighborhoods, is that we let that spiral continue and continue to harm families and neighborhoods in a dramatic way."
Although Boehner dismissed the plan, he insisted he would be willing to talk to the White House. "I am always open to working with the president of the United States. We both have a job to do. If it makes economic sense, if it's fiscally responsible, certainly I'll take a look at it," he said.
Boehner provides extensive links to federal homeowner assistance programs on his congressional district website.
Michael McAuliff covers politics and Congress for The Huffington Post. Talk to him on Facebook.