Obama Housing Refinance Proposal and Program Essay

Obama Housing Refinance Proposal and Program - Essay ExampleAccording to the inquiry findings it can therefore be said that President Obama announced a new plan to aid struggling homeowners who ar current on their mortgages, but underwater by refinancing. Mortgage rates are currently at historical lows and Obama would like to make refinancing into these historic rates available to more homeowners crosswise the country. Obama anticipates providing relief to ab by 3.5 million people with underwater mortgages. Obama expect the average homeowner to save most $300-$500 a month by refinancing into these new low rates. He explained that refinancing would help free up additional money for consumers, therefore helping to stimulate the economy. Obama faces stiff opposition from Republicans in Congress on his refinancing plan, which must first pass congress. United States is known as the land of opportunities and people from all oer the world come to the country in hope of a better future. But this land of opportunities is liner some serious crisis lately. The financial crisis of 2008 has hit the country badly and has affected the majority of the population. Approximately 11 million people are suffering from serious financial watershed and they cannot even afford a right(a) shelter to live in. The reason for these problems in the United States and the attempts that American President Barack Obama made to salvage the issues of the citizens will be discussed in this paper. The residents of the United States were mortgaged in large numbers and therefore the interrupt of the housing market forced many people out on the streets. The homeowners were to pay off the nub of money that was worth more than their houses which was due to the decrease in prop rates all everywhere the country. This is where the decision maker Obama stepped in. He decided to revise the Housing Refinance Proposal that would bring out the homeowners from their misery. Previous Financing Policies The United States government is well known for their extra ordinary Housing pay Policies. The housing policies of the country are considered as standards for the less developed countries. Lets discuss presently about the previous Financing Policies that were implemented by the United States government. The United States Housing indemnity allowed residents to train tax deductable interest payments. This practice is unique because a certain amount of tax is always utilise on the interest payments for loans in different parts of the world (Barth, et. al.178). The deduction of tax meant a gigantic assistance for the house owners of the country. Furthermore, the United States government also set up an organization that would be answerable for providing securities to the loan borrowers. The organization was named as the Federal Housing Administration and the FHA was there to handle the security issues. hence no one was denied a loan because of absence of security or collateral. U nfortunately the policies that were devised by the US government did not work even though they contained some points that were exemplary for the rest of the world. The Housing Policy of the US failed dramatically because every other person was given loans that they couldnt afford. The assumption behind the policies was that property prices will continue to increase in future. The reason behind the failure was also the benefits provided to the borrowers. Giving loans without proper collaterals was a big mistake of US administration. Issues of the existing policies and poverty of people The policies that were set up by the US government were for the prosperity of the homeowners. US being a democratic nation, prevailing policies were not apprehended by all. Many banks austerely protested against the deduction of tax. According to their point of view, excluding the tax would not be fertile for the banks in the long run. Also the numbers of the customers getting loans certainly increas ed as a event of these policies. This resulted in more