Responsible Families Deserve Mortgage Relief

About Raphael Bostic:

Raphael Bostic is assistant secretary for policy development and research at the Department of Housing and Urban Development.

As President Obama made clear in the State of the Union, the single biggest drag on our economic recovery remains our housing market. At the center of the problem are the more than 10 million families across the country who owe more on their mortgages than their homes are worth. In many ways, these borrowers hold the key to the broader housing and economic recovery.

Millions of these underwater families continue to pay their mortgages on time. They've worked hard to weather a storm not of their making. Even as they've watched their home values fall, they've kept up with their mortgage payments every month for nearly four years. Their diligence has prevented more distress from hitting housing markets across the country, and kept already strained neighborhoods and communities from being even harder hit. These families deserve our help not just because they need it—but precisely because they've been responsible and we have all benefited by them. The market shouldn't have to hit bottom for them to get relief.

That's why last week, the president called on Congress to make it easier for underwater homeowners current on their mortgages to refinance those mortgages and save an average of $3,000 each year. It is the right thing to do.

[Check out the U.S. News housing blog The Home Front.]

Some may ask why government should help. But this crisis was fed by a mortgage system that had become far too complex—and it's that very complexity that has made the economy harder to fix. Government can play an important role in resetting the system and returning the market to a more straightforward path. That's why the president's refinancing plan is so important. If Congress passes it, we'll be able to knock down a key barrier on the road to recovery.

And government won't be the only one helping. The president's plan includes support from the largest banks—in the form of a Financial Crisis Responsibility Fee—to make sure that those whose recklessness helped cause this crisis in the first place are part of the solution. As a consequence, the president's plan not only won't add a dime to the deficit or ask anything of taxpayers—it ensures that those responsible for the damage are doing their part to help us recover from it.

At the end of the day, this plan is about standing up for responsible families who've done the right thing—and whose future is central to our recovery.

They haven't walked away from their obligations. We shouldn't walk away from ours.

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