Statement by AFL-CIO President Richard L. Trumka On President Obama’s Plan to Help Homeowners Refinance Underwater Mortgages and Create a Homeowner Bill of Rights

Washington, DC–(ENEWSPF)–February 2, 2012. President Obama proposed welcome new assistance to homeowners who cannot refinance their mortgages because the bursting of Wall Street’s real estate bubble has led to the precipitous decline of their homes’ value.  These underwater mortgages are hampering America’s economic recovery by preventing homeowners who are current on their mortgage payments from taking advantage of today’s low interest rates.

Without a path to refinance their underwater mortgages, millions of working families are trapped paying inflated mortgage payments.  We need to ensure that the Federal Reserve’s monetary policy of maintaining low interest rates helps all Americans, not just the big banks.  That’s why today’s announced plan is so important to getting our economy working again.

The jobs crisis and the foreclosure crisis are two sides of the same coin – we need to tackle both to repair our economy.  We applaud the President’s leadership in offering jobless homeowners at least 12 months of forbearance on their mortgage payments to get back on their feet.  And Congress must act now and enact President Obama’s Project Rebuild to invest $15 billion in construction jobs to renovate homes and businesses in communities where foreclosures are most concentrated. 

As proposed by the President, a Homeowner Bill of Rights will protect working families from abusive mortgage servicing practices.  Principal reduction will offer genuine help to homeowners who are struggling with their mortgage payments.  The big banks that caused the financial crisis now need to pay their fair share to help homeowners refinance their underwater mortgages.  We strongly support the President’s commitment to hold the banks accountable by partnering with state Attorneys General to investigate wrongdoing in the creation of mortgage backed securities.