Viewpoint: Hey Mr. President, How About Housing?

President Obama devoted exactly 57 words to the housing crisis in his 34-minute speech about jobs. Yes, we understand that the speech was intended to be about jobs -- pass this bill -- and that the lack of jobs -- pass this bill -- has pushed Americans to the brink.

Still, watching the president's speech were millions of Americans who are upside down on their home loans. And with all due respect, Mr. President, the only patient in the room who hasn't had a chance at the morphine drip has been the homeowner. Homeowners need relief from their lenders in the form of principal reductions and the ability to refinance at current low rates.

Many of them, staring down the gun barrel of a foreclosure, wanted to hear you say something besides these 57 words: "And to help responsible homeowners, we're going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent -- a step 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."

Given the limited words we have to judge the president's intentions, we are forced to parse what we heard -- and it wasn't much to help the struggling housing market.

Let's start with "responsible homeowners." The President didn't give us a clue who he considers responsible and irresponsible. Is the guy who lost his job irresponsible for falling behind in his loan payments? How about the family that got snookered into an adjustable rate loan that reset in the midst of the world's deepest recession; were they irresponsible?

And perhaps more important, will the president hold John Q. Underwater to the same level of "responsibility" that he held the banks when Washington gave them hundreds of billions in bailout money?

"Federal housing agencies," Mr. President? Does that mean that only those whose loans were government-backed will reap the rewards of your largesse? What about those who weren't but still have the same struggles making their mortgage payments? Have you ever applied for a home loan, sir? Trust us when we say that most people sit in an escrow office and sign a stack of papers without reading them. Half of America probably can't tell you what an APR or a loan point is, let alone whether they stumbled into a loan that had FHA backing. The government can mandate all the good faith estimates and disclosures it wants and still, nobody is going to read them. Get real. Make this simple and make this inclusive. Bail everyone out the same.

". . . help more people refinance their mortgages at interest rates that are now near 4 percent." That's a lovely thought, and we certainly do need changes to the current lending standards that are so stringent that only a fiscal contortionist can meet them. But refinancing to a lower rate is a pretty dumb thing for people who are upside down to do. Refinancing the same loan amount -- an amount that exceeds the current value of the property -- makes the assumption that the property value is going to rise. Try and sell that idea to someone who's been struggling these past few years.

Let's put this one in context for you, Mr. President: If the White House was worth $331.5 million three years ago and last January was worth just $253.1 million, would you still want to be borrowing $100 million on it? Wouldn't you want your new loan to reflect the current market, not the market that you bought in? Or might it just be easier to let the bank -- or in your case, the GOP -- take the house from you?

Also see:
Low Mortgage Rates Are Great -- But Most Can't Qualify

Mortgage Mod Hell: Trapped Between Lenders, Collectors

HAMP Mortgage Modification Program Still No Help
The Mortgage Fix That Can Save the Economy

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