February 1st, 2012
01:25 PM ET
Washington (CNN) – House Speaker John Boehner is expressing skepticism about President Obama’s latest plan to lift the country’s housing market, suggesting government programs designed to help mortgage holders have long proven ineffective.
“We've done this at least four times where there's some new government program to help homeowners who have trouble with their mortgages,” Boehner told reporters on Capitol Hill Wednesday. “None of these programs have worked and I don't know why anyone would think that this next idea's going to work and all they've done is delay the clearing of the market. “
The comments came shortly before the president unveiled a new proposal that the administration says would allow millions of homeowners to refinance their mortgages at a lower rate, saving the average family $3,000 a year.
Specifically, the president is calling on Congress to pass legislation mandating banks allow homeowners to refinance even if their current home value has fallen below what they owe on their mortgage. Currently, most banks do not permit so-called underwater homeowners to refinance, even if there is a history of good credit and timely payments.
The cost of the president’s new proposal is expected to be between $5-$10 billion according to administration estimates. It will be paid for by exacting a fee on the nation’s largest financial institutions – likely a nonstarter with Congressional Republicans who have rejected previous attempts to levy fees on the big banks.
“The sooner the market clears and we understand where the prices really are will be the most important thing we can do in order to improve home values around the country,” Boehner said.
Speaking at a community center in northern Virginia Wednesday morning, the president directly refuted that notion.
“It is wrong for anybody to suggest that the only option for struggling, responsible homeowners is to sit and wait for the housing market to hit bottom,” he said. “I refuse to accept that, and so do the American people.”
The new proposal in an extension of efforts the president first announced in 2009 to encourage holders of mortgages originated from government-backed Fannie Mae and Freddie Mac to refinance at lower rates. While the administration had initially projected as many as 5 million households would benefit under those efforts, to date only about 1 million have been helped.
“I’ll be honest - the programs that we put forward haven’t worked at the scale that we hoped,” Obama said. “Not as many people have taken advantage of it as we wanted.”
The proposal the president announced Wednesday also calls for a “Homeowners Bill of Rights,” which he said would add more transparency to the mortgage process. He also said his administration is looking into ways current foreclosed homes can be converted to rental properties.