Remarks of President Barack Obama – As Prepared for Delivery On the Economy and Housing
Las Vegas, Nevada October 24, 2011
As Prepared for Delivery:
Good afternoon. Without a doubt, the most urgent challenge we face right now is getting our economy to grow faster and create more jobs. I know it, and folks in Nevada sure know it. And I think most Americans also understand that our economic problems didn’t happen overnight, and they won’t be solved overnight.
What people don’t understand, though, is why some elected officials in Washington don’t seem to share the same sense of urgency they feel in their own lives. Last week, for the second time this month, Republicans in the Senate blocked a jobs bill from moving forward – a bill that would’ve meant jobs for nearly 400,000 teachers, firefighters, and first responders. It was the kind of proposal Republicans and Democrats have voted for in the past. It was paid for. And it was supported by an overwhelming majority of the American people. But they still said no. Your Senator, Harry Reid, has been fighting nonstop to help us get the economy going – but he’s not getting help from all the members of the Nevada delegation. So we need to tell them to get their act together.
Because the truth is, the only way we can truly attack our economic challenges – the only way we can put hundreds of thousands of people back to work right now – is with bold action in Congress. That’s why I’m going to keep forcing these Senators to vote on common-sense, paid-for jobs proposals. But last month, when I addressed a joint session of Congress about our jobs crisis, I also said that I intend to do everything in my power to act on behalf of the American people – with or without Congress.
So I’m here to say that we can’t wait for an increasingly dysfunctional Congress to do its job. Where they won’t act, I will. In recent weeks, we decided to stop waiting for Congress to fix No Child Left Behind, and decided to give states the flexibility they need to help our children meet higher standards. We took steps to dramatically reduce the time it takes for small businesses to get paid when they have a contract with the federal government. And we eliminated outdated regulations that will save hospitals and patients billions of dollars.
These steps aren’t a substitute for the bold action we need to create jobs and grow the economy, but they’ll make a difference. I’ve told my administration to keep looking every day for actions we can take without waiting for Congress – steps that can save consumers money, make government more efficient and responsive, and help heal the economy. We’ll be announcing these executive actions on a regular basis.
Today, I’m here to talk about housing. Probably the single greatest cause of the financial crisis and this brutal recession has been the housing bubble that burst four years ago. Since then, average home prices have fallen by nearly 17 percent. Nationwide, more than 10 million homeowners are underwater – which means they owe more than their homes are worth. And here in Las Vegas, the city hit hardest of all, almost the entire housing market is under severe stress.
It’s a painful burden for middle-class families. And it’s a drag on our economy. When a home loses its value, a family loses a big chunk of its wealth. Paying off mortgage debt means consumers spend less, businesses make less, and jobs are harder to come by. And as long as this goes on, our recovery can’t take off as quickly as it would after a normal recession.
So the question now is not whether or not to do something about it – it’s what to do about it.
One idea I’ve proposed that’s in the American Jobs Act before Congress is called Project Rebuild. A lot of homeowners in neighborhoods like this one have watched the value of their home decline not just because the housing bubble burst, but because there’s a foreclosure sign next door or a vacant home across the street. Right now, there are hundreds of thousands of vacant homes like these, and more than a million unemployed construction workers.
That doesn’t make any sense when there’s work to be done and workers ready to do it. Project Rebuild will connect the two, helping the private sector put construction workers to work rehabilitating vacant or abandoned homes and businesses across the country. That will help stabilize home prices in communities like this. It will help families like the Bonillas buy a new home and build a nest egg. It’s something Congress can pass right now.
So if Congress passes the Jobs Bill, we can get Project Rebuild moving right away. If Congress acts, folks in Nevada and across the country will get significant relief. But we can’t just wait for Congress to act. Until they do, we’re going to act on our own. Because we can’t wait for Congress to help our families and our economy.
Now, over the past two years, we’ve already taken some steps to help folks refinance their mortgages. Nearly a million Americans with little equity in their homes have gotten assistance so far. We’ve also made it easier for unemployed homeowners to keep their homes while looking for a job. And we’re working to turn vacant properties into rental housing, which will help reduce the supply of unsold homes and stabilize housing prices here in Las Vegas and across the country. But we can do more. There are still millions of Americans who have worked hard and acted responsibly, paying their mortgage payments on time. But now that their homes are worth less than they owe on their mortgage, they can’t get refinancing.
That will soon change. Last month, I directed my economic team to work with the Federal Housing Finance Agency and their partners in the housing industry to identify barriers to refinancing, knock them down, and explore every option available to help as many American homeowners as possible.
Today, I’m pleased to say that agency is announcing a series of steps to help responsible homeowners refinance and take advantage of these low mortgage rates.
First, the barrier will be lifted that prohibits responsible homeowners from refinancing if their home values have fallen so low that what they owe on their mortgage is 25 percent higher than the current value of their home. This is critically important for a place like Las Vegas, where home values have fallen by more than 50 percent over the past five years.
Say you have a $250,000 mortgage at a 6 percent interest rate, but the value of your home has fallen below $200,000. Currently, you can’t refinance. You’re ineligible. That’s about to change. If you meet certain requirements, you will have the chance to refinance at lower rates, which could save you hundreds of dollars a month, and thousands of dollars a year in mortgage payments.
Second, there will be lower closing costs, and certain refinancing fees will be eliminated – fees that can sometimes cancel out the benefit of refinancing altogether.
Third, there will be more competition so that consumers can shop around for the best rates. Right now, some underwater homeowners have no choice but to refinance with their original lender – which some lenders refuse to do. These changes will encourage other lenders to compete for their business by offering better terms and rates, and eligible homeowners to shop around for the best ones.
These are important steps that will help more homeowners refinance at lower rates, save consumers money and help get folks spending again. And I’ll keep doing everything in my power to help grow the economy, accelerate job growth, and restore some of the security middle class families have felt slip away for more than a decade.
Now, these steps I’ve highlighted today will not solve all the problems in the housing market. Given the magnitude of the housing bubble, and the huge inventory of unsold homes in places like Nevada, it will take time to solve these challenges. We will still need Congress to pass the Jobs Bill – and even then, the housing market won’t be fully healed until the unemployment rate comes down and the inventory of homes on the market comes down.
But that is no excuse for inaction. That is no excuse for crossing your arms and saying “no” to Americans who need help now. There is no excuse for the games and gridlock we’ve seen in Washington. Folks out here don’t have the time or the patience for it. If any Member of Congress thinks there are no unemployed workers or neighborhoods in their district that would benefit from the proposals in the Jobs Bill, or that folks don’t know what’s really going on, they better think again. They still have the chance to take meaningful action to put people back to work, and to help middle class families and homeowners like the Bonillas. But we can’t wait for that action. I won’t. So I’m going to keep taking this message across the country. And I hope folks will join me.