WASHINGTON (AP) — The Obama administration is trying to fix a stubborn drag on the economy by allowing all homeowners to refinance their mortgages at lower interest rates even if they owe more than their homes are worth.
President Barack Obama plans to detail a proposal Wednesday that he outlined in his State of the Union address to allow homeowners with privately held mortgages to take advantage of record low rates. The plan could save about $3,000 a year for the average borrower and tackles an issue of vital concern in states that are key to Obama’s re-election.
The administration proposal faces a major hurdle in Congress. The program would be paid for by a fee on large banks. The administration has tried unsuccessfully before to win support for assessments on large banks.