President Barack Obama will tout newly unveiled measures on Monday aimed at aiding struggling homeowners and easing the U.S. housing crisis on the first leg of a campaign-style swing through western states crucial to his re-election in 2012.
Stymied by Republican resistance to his $447 billion jobs package and tapping into public displeasure with Congress, Obama is rolling out a series of economic remedies that do not require approval from a fractious Congress, a White House official said.
A leading U.S. housing regulator on Monday announced changes to a government refinancing program that could help up to one million homeowners classified as underwater because their mortgages cost more than their homes are worth.
The plan for homeowner relief will be the centerpiece of Obama's visit on Monday to Nevada, the state with the highest foreclosure rate in the country.
It is the latest White House effort to deal with a key factor stalling the economy -- a crippled housing market -- and adding to political liabilities for Obama, whose re-election bid is already imperiled by stubbornly high U.S. unemployment.
It remained unclear whether the Obama administration's revised approach, which falls short of an overarching plan that some experts have said is needed, will provide enough of a boost to the battered housing market to spur the stagnant U.S. economic recovery.
Earlier federal programs to curb housing foreclosures have failed to yield the benefits initially promised. An estimated 11 million U.S. homeowners hold properties that are worth less than their mortgages.
Seeking to show he is ready to take unilateral action to confront economic problems, Obama will also unveil a student loan initiative on a visit to Colorado. He will attend fundraising events in both states plus California during the three-day trip.
The states on Obama's tour were chosen deliberately.
Each has large populations of Hispanics, a voting bloc Obama's campaign is eager to win over. Nevada and Colorado are swing states that alternate allegiance between Republicans and Democrats, making them valuable political prizes in presidential elections. Both could prove critical to Obama's chances in the November 2012 election.
He will use them as a backdrop to make his latest push to boost the weak economy, which remains the biggest obstacle to his hopes of retaining the presidency. According to the White House official, he will also try out a new slogan to put pressure on Congress: We can't wait.
'SAVE HIS OWN JOB'
Republicans, choosing among a field of presidential candidates currently led by former Massachusetts governor Mitt Romney and businessman Herman Cain, accused Obama of focusing more on fundraising than helping the unemployed.
The president is back to doing what he does best -- raising money to save his own job, said Reince Priebus, chairman of the Republican National Committee, in a new advertisement. Instead of focusing on getting the 14 million unemployed Americans back to work, he's focusing on protecting his own.
Housing is one area that has dogged Obama's efforts to improve the economy.
His administration has been working with the Federal Housing Finance Agency (FHFA), the regulator for mortgage giants Fannie Mae and Freddie Mac, to find ways to make it easier for borrowers to switch to cheaper loans even if they have little to no equity in their homes.
Obama will highlight the result of that work during his stop in Nevada, the epicenter of the foreclosure crisis.
Before Obama left Washington, the FHFA announced it was easing the terms of the two-year-old Home Affordable Refinance Program, which helps borrowers who have been making mortgage payments on time but have not been able to refinance as home values have dropped.
To help underwater borrowers, FHFA said it will scrap a cap that prohibits any homeowners whose mortgage exceeds 125 percent of the property's value from participating in HARP, which is targeted at loans backed by Fannie and Freddie.
Regulators are revamping the refinancing program to ensure banks are protected from having to buy back HARP loans. The requirements now state they will only have to verify that borrowers have made at least six of their last mortgage payments and in most cases, eliminate the need for appraisals.
FHFA said that Fannie and Freddie will waive certain fees for borrowers that refinance into loans with a shorter term, aiming for homeowners to pay down the amount they owe at a faster rate.
HARP, one of the Obama administration's anti-foreclosure efforts, was unveiled in March 2009 and expected to help as many as 5 million borrowers. So far, 893,800 borrowers have refinanced their loans through August by using HARP. FHFA said it will extend HARP until Dec. 31, 2013.
With mortgage rates currently near record lows, allowing these underwater borrowers to refinance could help stave off a wave of foreclosures and free up cash for other spending that could help underpin the economy's recovery.