March 29, 2024

Expansion of Mortgage Program Is Limited in Scope

The effort, built on sweeping voluntary agreements with the mortgage industry to let people refinance even if their homes have declined in value, reflects a new White House emphasis on economic measures that do not require Congress to overcome its bitter partisan divisions.

It also maintains a choice President Obama made in the early days of his administration to focus on reducing monthly payments rather than on the amounts that borrowers owe, the latter being what a growing number of liberal and conservative economists consider necessary to resolve the problem.

Republicans, including the presidential candidates, generally oppose federal aid for distressed homeowners as a bailout for people who made bad choices. The new program, and the emphasis on unilateral action, seem likely to inflame that opposition.

The plan’s modesty, meanwhile, may not assuage Democrats’ anger at the administration for doing too little to help homeowners repair their shattered finances, particularly in the face of evidence that the housing crisis is a major impediment to renewed economic growth.

Speaking in Las Vegas on Monday — in the center of the housing crisis and in a presidential battleground state — Mr. Obama addressed both groups of critics. The problems required government action, he said, and while the new changes were not by themselves sufficient, “that is no excuse for inaction.”

“I’m here to say that we can’t wait for an increasingly dysfunctional Congress to do its job,” he said. “Where they won’t act, I will.” He added, however, that Congress should pass the measures he proposed in September to stimulate growth, create jobs and help the housing market.

Most of the Republican presidential candidates argue that the government should focus on repairing the economy, which will help the housing market. In the meantime, they have said, offering relief to homeowners threatened with foreclosure would be an intrusion into the free market.

“The right course is to let markets work,” Mitt Romney said at a debate in Las Vegas last week. Rick Santorum concurred. Herman Cain said, “We need to get government out of the way.”

Monday’s announcement is an effort to revive a program that has fallen well short of expectations since it was announced in 2009. Under the program, the government-owned mortgage companies Fannie Mae and Freddie Mac have financed new loans for almost one million borrowers who could not qualify for traditional loans because of declines in their homes’ values.

The expansion, announced by the Federal Housing Finance Agency, aims to double that number — although that would still be a small share of the more than 10 million homeowners with loan balances larger than the values of their homes.

“We have far too many Americans who have paid their bills and done everything right on their mortgages and yet they’re still stuck with interest rates of 6 or 7 percent,” said Shaun Donovan, secretary of housing and urban development.

The changes, which will take effect over several months, will let people qualify for new loans no matter how far the values of their homes have fallen, so long as they have made at least six consecutive monthly payments. The plan also will reduce borrowers’ fees, for example, by dispensing with the need for an appraisal in many cases and by automatically transferring mortgage insurance to the new loan.

Fannie Mae and Freddie Mac generally require refinancing lenders to assume responsibility for any problems with the original loan because in making the new loan they are relying in part on that original documentation. That has made lenders reluctant to refinance loans for which they are not already responsible. That provision will now be waived, in exchange for a fee.

But the program still applies only to loans that Fannie and Freddie acquired before May 31, 2009. It does not reduce the amount that borrowers owe. And only borrowers with less than 20 percent equity in their homes are eligible; those with more equity must seek a refinancing through the standard and more expensive channels, although the government is considering making some of the same changes, like reducing fees, for those borrowers.

Jackie Calmes contributed reporting from Las Vegas, and Trip Gabriel from New York.

Article source: http://feeds.nytimes.com/click.phdo?i=3396bcde278ebed992b4ff86fe85c89c

Boeing Plant Is Expected to Get Lift From House

The Republican-controlled House is expected to approve an unusual bill that would bar the labor board from pursuing the board’s pending action against Boeing, which Republicans have been denouncing day after day.

Republican leaders and business groups are vigorously backing the bill, saying it would safeguard the freedom of corporations to locate operations where they want.

But many Democrats and labor unions have denounced the bill, asserting that it would badly weaken an independent federal agency and be an improper favor to Boeing, a prominent political contributor.

The Republican bill, called “The Protecting Jobs from Government Interference Act,” would prohibit the labor board from “ordering any employer to close, relocate or transfer employment under any circumstances.”

Republicans are angry that the labor board’s acting general counsel filed a complaint against Boeing in April, asserting that the company had built an assembly line in South Carolina to retaliate against unionized workers in Washington State for engaging in numerous strikes.

The National Labor Relations Act bars employers from taking any actions, including transferring an operation, in retaliation against workers for exercising their federally protected rights, including forming a union or going on strike.

Representative Eric Cantor, Republican of Virginia and the House majority leader, has condemned the board’s move, calling it an “overbearing action” that discriminates against right-to-work states in the South and makes it “nearly impossible” for Boeing to add additional workers. Several Republican presidential candidates have also criticized the complaint. For example, Mitt Romney visited South Carolina last Monday and called the move “an egregious example of political payback, where the president is able to pay back unions for the hundreds of millions of dollars they put in his campaign.”

The labor board is an independent agency that enforces federal laws regarding unionization and labor-management relations in the private sector. The president appoints its board members and general counsel, who is independent from the board and prosecutes cases claiming unfair labor practices.

The acting general counsel, Lafe E. Solomon, has asked an administrative law judge in Seattle to order Boeing to move the production line, which will build seven planes a month, from South Carolina to Washington State. The House bill to halt action against Boring has a retroactive provision that would nullify labor board complaints, like the Boeing one, for which “final adjudication” has “not been made.”

If the administrative law judge rules against Boeing, the company could appeal to the full board itself.

Mr. Solomon issued a statement Wednesday, saying his decision to issue a complaint against Boeing “was based on a careful investigation and a review of the facts under longstanding federal labor law.”

“The decision had absolutely nothing to do with political considerations, and there were no consultations with the White House,” he said. “Regrettably, some have chosen to insert politics into what should be a straightforward legal procedure. These continuing political attacks are baseless and unprecedented and take the focus away from where it belongs — the ongoing trial in Seattle.”

To prove that Boeing’s decision to assemble the 787 Dreamliners in South Carolina was retaliation, Mr. Solomon pointed to statements by top Boeing executives saying their dismay about past strikes was motivating them to open the production line in North Charleston. But Boeing officials say low costs were the reason they located the plant in South Carolina. Some assembly began there this summer.

Richard L. Trumka, the A.F.L.-C.I.O.’s president, said the Republican bill was “sleazy legislation,” and added, “This is sweeping legislation that would gut the National Labor Relations Act and result in serious harmful changes to workers’ rights throughout the country.”

He said that if the bill passed, the labor board would be powerless to stop an employer from moving an operation to punish workers who staged a protest against unsafe conditions or sexual or racial discrimination.

Republicans have voiced confidence that the bill will pass the House, which they dominate. But Bill Samuel, the A.F.L.-C.I.O.’s legislative director, said defeat of the bill was possible, although he said the bill’s chances were not good in the Senate, which is controlled by Democrats.

Representative John Kline, a Minnesota Republican and chairman of the House Education and the Workforce Committee, has strongly backed the bill. “No government board should have the authority to dictate where a private employer can run a business,” he said.

But Representative George Miller of California, the committee’s senior Democrat, said the bill was “the Outsourcers’ Bill of Rights.” He said that Republicans were pushing the bill “to change the rules midtrial on behalf of one Fortune 500 company.”

Aric Newhouse, senior vice president for policy and government relations with the National Association of Manufacturers, said the action against Boeing was hurting job creation and discouraging investment in right-to-work states.

Article source: http://feeds.nytimes.com/click.phdo?i=76051188e38317c5047d6ce1d0311e62