Our guest blogger is Elon Green, a freelance writer living in Brooklyn.
This week, in an attempt to boost the economy without having to deal with Congress, the Obama administration announced an overhaul of its mortgage refinancing program known as HARP. The changes will allow more people to take advantage of low interest rates, freeing up more money for them to spend elsewhere.
As we noted yesterday, this idea is supported by 2012 GOP presidential hopeful Mitt Romney’s top economic adviser, Columbia University’s Glenn Hubbard. Hubbard called Obama’s refinancing plan “a big deal.” “It looks like a good plan; I’m glad they’re doing it,” he said. And as it turns out, Romney himself supported a refinancing plan when President Bush announced one in 2007.
In late August 2007, as the subprime mortgage crisis built up, Bush introduced an initiative overseen by the Federal Housing Authority to “help struggling homeowners find a way to refinance” and stem foreclosures. According to Bush, while it was “not the government’s job to bail out speculators,” there were a lot of homeowners “who could get through this difficult time with a little flexibility from their lenders or a little help from their government.”
A week later, during an interview with Hugh Hewitt, Romney professed no concerns about the program:
Well, the President has taken action that should calm a good portion of the market, which is he said look, these people who borrowed money from the sub-prime world with these reset provisions, where the payments go up in later months, and they were told by their mortgage banker in many cases don’t worry about that, we’ll refinance it when that time comes, well, now the mortgage banker’s gone, they can’t refinance it. And so he’s saying, the President’s saying let’s have the FHA refinance these mortgages. It’s not a bailout, but it is a setting which gives people stability, and will calm the markets to a certain degree.
In an interview last week with the Las Vegas Review Journal, Mitt Romney opined that the Obama administration has no right to provide assistance to homeowners facing foreclosure, saying that the foreclosure process ought to “run its course and hit the bottom.
However, he did add, “I think the idea of helping people refinance homes to stay in them is one that’s worth further consideration.” So given his prior support for the idea, is Romney on board with the administration’s effort?