However, rather than receiving praise for the speech that serves as a preliminary view of the American Jobs Act, which the President plans to send to Congress soon, critics argued whether he has the authority to interfere with private contracts.
In his speech, he vowed to take executive action to permit more Americans to refinance their mortgages. Nonetheless, lawyer and adjunct law professor Marty Robins states that if President Obama can interfere with private contracts “what prevents him or Congress from taking similar action with auto loans, credit card debt or anything else.”
Still, Peter Goodman, former economics beat reporter for the New York Times, believes “the President can force mortgage companies to aggressively provide relief to homeowners who owe the bank more than their homes are worth, writing down principal balances.”
While the views of Goodman and Robins are opinions, the fact is that the American Jobs Act will include tax cuts, an extension of unemployment insurance, and a series of job-creation efforts. This bill is the first step in a sequence of events, which the President is taking to spur mortgage refinancing.
The legislation includes the creation of a national infrastructure bank, one of the bullet points candidate Obama campaigned with during the 2008 election. However, this effort has failed to gain sufficient Republican support in Congress.
President Obama spoke about modernizing 35,000 schools and jump-starting thousands of transportation projects. This is good news for Quicken Loans chairman and founder Dan Gilbert, who is a member of a private investment firm hoping to fund a light-rail train system that will illuminate Detroit 2.0 from the city center to 8 mile road.
The President suggests that the American Jobs Act will also benefit responsible homeowners stating, “we’re going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are near 4 percent.”
After roaring applause he continued “I know you guys must be for this, because that can put more than $2,000 a year in a family’s pocket, and give a lift to an economy still burdened by the drop in housing prices.”
The specifics about the new refinancing plan were not revealed. Yet, chances are the new program will do better than the existing government refinancing program, open to homeowners current on their mortgages that don’t owe more than 25 percent above the value of their home, which the administration said would help 4 to 5 million people and has helped around 800,000 families to date.
Specifics about the American Jobs Act and the new refinancing plan will be reported on ZING! as details become available.
Jonathan Slappey writes for Quicken Loans, ranked “Highest in Customer Satisfaction for Primary Mortgage Origination” by J.D. Power and Associates. Check out what some of our amazed customers have to say at Epinions.