Obama Uses Bully Pulpit to Promote Mortgage Programs

President Barack Obama put on his salesman's hat Thursday, urging homeowners to take advantage of low interest rates and new government programs to refinance their mortgages to save money and help boost the economy.

Obama met with reporters prior to a roundtable meeting on home financing at the White House. Participants included a number of homeowners from the Washington, D.C. area who had recently been able to refinance or modify their mortgages to avoid foreclosure or just save money.

"The main message that we want to send today is, there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates," he said. "We estimate that the average family can get anywhere from $1,600 to $2,000 a year in savings by taking advantage of these various mortgage programs that have been put in place."

The president made a direct pitch for his new homeowner assistance program, Making Home Affordable, making repeated references to the program and giving out its web address - www.makinghomeaffordable.gov - several times.

Housing market a key focus

The administration has been moving aggressively to prop up the plummeting housing market and stem the tide of foreclosures, working with the Federal Reserve to reduce mortgage interest rates and free up capital for lending. The administration's Making Home Affordable Program, announced in early March, is the latest in a series of government initiatives, most of them predating the Obama administration, designed to help homeowners avoid foreclosure by refinancing or modifying their loans.

Several of the homeowners participating in the roundtable reported that they had been able to obtain substantial monthly savings, ranging from $400-$1,200 a month, by refinancing and consolidating debt. However, it is not clear whether any had obtained relief under the administration's program. At least three who refinanced did so in February or before, prior to the unveiling of the Making Home Affordable program.

Lenders still coming aboard

Bank of America has reported that it began to process applications for mortgage refinancing under the new program on April 1, but most lenders appear to still be working out the kinks in the program. Mortgage counselors in various parts of the country contacted the first week of April said they had yet to hear of clients obtaining relief under the program at that time. The program is specifically designed to assist borrowers whose homes may have lost value or are in financial distress.

Even so, many borrowers have been able to take advantage of the currently low interest rates to refinance their homes either directly through their lenders or with the aid of previously existing programs. Wells Fargo on Wednesday announced a record $3 billion in profits for the first quarter of 2009, with mortgage refinancing a major contributor. The trend is continuing, with the Mortgage Bankers Association reporting that mortgage applications for the week ending April 3 were up 67 percent from a year before, with 77 percent being refinancing.