Washington, D.C. — In reaction to President Barack Obama’s State of the Union address tonight, Julia Gordon, Director of Housing Finance and Policy at the Center for American Progress, released the following statement:
We welcome President Obama’s comments regarding the importance of assisting homeowners, particularly his support for programs to enable more homeowners to refinance their homes. Allowing more underwater homeowners to refinance their mortgages at today’s low rates will support the housing recovery, provide much-needed financial relief to strapped homeowners, and boost consumer demand, simultaneously strengthening the middle class and stimulating economic growth.
Furthermore, we agree with the president that mortgage regulations governing lenders and securitizers should line up with each other to avoid constraining access to affordable credit.
Finally, we fully support the call to rebuild hard-hit neighborhoods, a task that will require the cooperation and participation of mortgage investors, municipalities, financial institutions, and regulators. Effective loan modifications, particularly principal reduction, can prevent home vacancies altogether, but in situations where that is not possible, short sales or long-term lease arrangements can help limit the damage to communities.