Reporting from Washington — For some time now, many economists have been saying that the nation's depressed housing market is the Achilles' heel of the recovery. And many struggling homeowners have been holding out hope for government relief.
President Obama//// seems to be listening. In his weekly address Saturday, Obama called the housing crisis the "single biggest drag" on the economy and said he would follow through on his state of the union pledge to help more people reeling from the housing collapse (see video below).
The president's plan, details of which were released earlier this week, would expand on a government program to allow more homeowners to refinance their mortgages. The new plan would focus on people who are current on their monthly payments and holding on to underwater mortgages owned by banks or investors.
Obama's refinancing program launched in 2009 targeted borrowers with mortgages owned or backed by government agencies Fannie Mae and Freddie Mac, but it has helped a disappointingly small number of homeowners, leaving still millions of borrowers owing more on their loans than their properties are worth. Refinancing would help them take advantage of today's ultra-low interest rates, thereby freeing up cash for spending or allowing them to pay down the principal faster and build equity. The administration has made tweaks to that existing program and is now hoping to extend the refinancing plan to an additional 3.5 million homeowners.