LAS VEGAS — President Barack Obama offered mortgage relief on Monday to hundreds of thousands of Americans, his latest attempt to ease the economic and political fallout of a housing crisis that has bedeviled him as he seeks a second term.
"I'm here to say that we can't wait for an increasingly dysfunctional Congress to do its job," the president declared outside a family home in Las Vegas, the epicenter of foreclosures and joblessness. "Where they won't act, I will."
Making a case for his policies and a new effort to circumvent roadblocks put up by Republican lawmakers, Obama also laid out a theme for his re-election, saying that there's "no excuse for all the games and the gridlock that we've been seeing in Washington."
The new rules for federally guaranteed loans represent a recognition that measures the administration has taken so far on housing have not worked as well as expected.
His jobs bill struggling in Congress, Obama tried a new catchphrase — "We can't wait" — to highlight his administrative initiatives and shift blame to congressional Republicans for lack of action to boost employment and stimulate an economic recovery.
Later in the week, Obama plans to announce measures to make it easier for college graduates to pay back federal loans. Such executive action allows Obama to address economic ills and other domestic challenges in spite of Republican opposition to most of his proposals.
Although Obama has proposed prodding the economy with payroll tax cuts and increased spending on public works and aid to states, he has yet to offer a wholesale overhaul of the nation's housing programs. Economists point to the burst housing bubble as the main culprit behind the 2008 financial crisis. Meanwhile, the combination of unemployment, depressed wages and mortgages that exceed house values has continued to put a strain on the economy.
While the White House tried to avoid predicting how many homeowners would benefit from the revamped refinancing program, the Federal Housing Finance Administration estimated an additional 1 million people would qualify. According to Moody's Analytics, the figure could be as high as 1.6 million.
Under Obama's proposal, homeowners who are still current on their mortgages would be able to refinance no matter how much their home value has dropped below what they still owe.
By spelling out the plan to homeowners in a diverse, working-class Las Vegas neighborhood, Obama chose a state that provides the starkest example of the toll the housing crisis has exacted from Americans. One in every 118 homes in the state of Nevada received a foreclosure notice in September, the highest ratio in the country, according to the foreclosure listing firm RealtyTrac.
Presidential spokesman Jay Carney criticized Republican presidential candidate Mitt Romney for proposing last week while in Las Vegas that the government not interfere with foreclosures. "Don't try to stop the foreclosure process," Romney told the Las Vegas Review-Journal. "Let it run its course and hit the bottom."
"That is not a solution," Carney told reporters on Air Force One. He said Romney would tell homeowners, "You're on your own, tough luck."
The president also was using his visit to Las Vegas to promote a $15 billion neighborhood revitalization plan contained in his current jobs proposal that would help redevelop abandoned and foreclosed properties and stabilize affected neighborhoods.
The Nevada stop was the first leg of a three-day tour of Western states, blending his pitch for boosting the economy with an aggressive hunt for campaign cash.
From Nevada, Obama will head for the glamour of Hollywood and the homes of movie stars Melanie Griffith and Antonio Banderas and producer James Lassiter for some high-dollar fundraising. On Tuesday, he will tape an appearance on "The Tonight Show" with Jay Leno. He will also raise money in San Francisco and in Denver.
The refinancing program is being extended until the end of 2013. It was originally scheduled to end in June 2012.
The administration's incremental steps to help homeowners have prompted even the president's allies to demand more aggressive action.
Rep. Dennis Cardoza, a moderate Democrat from California, gave voice to Democratic frustration on the housing front last week when he announced his decision not to seek re-election and blamed the Obama administration directly for not addressing the crisis.
"I am dismayed by the administration's failure to understand and effectively address the current housing foreclosure crisis," Cardoza said in a statement that drew widespread attention. "Home foreclosures are destroying communities and crushing our economy, and the administration's inaction is infuriating."
Obama has now agreed to break the proposal into its component parts and seek congressional approval one measure at a time. The overall proposal would increase taxes on millionaires, lower payroll taxes on workers and businesses for a year, pay for bridge, road and school construction projects and help states and local governments retain teachers and emergency workers.
The proposals with the best chance of passage are the payroll tax cuts and extensions in jobless insurance to the long-term unemployed.
Countering Obama's criticism, GOP leaders said the sluggish economy and stubbornly high unemployment rate are the result of failed Obama administration policies.
"It's another day in the campaign life of President Obama, and he's bringing his re-election tour to Nevada, ground zero for the damaging effects of his failed economic policies," Republican National Committee Chairman Reince Priebus said Monday.
Two big questions loom over the Obama administration's latest bid to help troubled homeowners: Will it work? And who would benefit?
Here are some of the major questions and answers about the administration's initiative:
Q: What is the program?
A. The Home Affordable Refinance Program, or HARP, was started in 2009. It lets homeowners refinance their mortgages at lower rates. Borrowers can bypass the usual requirement of having at least 20 percent equity in their home. But few people have signed up.
Q. Why did so few benefit?
A. Mainly because those who'd lost the most in their homes weren't eligible. Participation was limited to those whose home values were no more than 25 percent below what they owed their lender. That excluded roughly 10 percent of borrowers, CoreLogic says.
Q: What changes is the administration making?
A. Homeowners' eligibility won't be affected by how far their home's value has fallen. And some fees for closing, title insurance and lien processing will be eliminated. So refinancing will be cheaper. The number of homeowners who need an appraisal will be reduced, saving more money. Some fees for those who refinance into a shorter-term mortgage will also be waived. Banks won't have to buy back the mortgages from Fannie or Freddie, as they previously had to when dealing with some risky loans. That change will free many lenders to offer refinance loans. The program will also be extended 18 months, through 2013.
Q: Who's eligible?
A. Those whose loans are owned or backed by Fannie Mae or Freddie Mac, which the government took control of three years ago. Fannie and Freddie own or guarantee about half of all U.S. mortgages — nearly 31 million loans. To qualify for refinancing, a loan must have been sold to Fannie and Freddie before June 2009. One late payment within six months, or more than one in the past year, would mean disqualification. Perhaps the biggest limitation on the program: It's voluntary for lenders. A bank remains free to reject a refinancing even if a homeowner meets all requirements.
Q: Will it work?
A. For those who can qualify, the savings could be significant. If, for example, a homeowner with a $200,000 mortgage at 6 percent can refinance down to 4.5 percent, the savings would be $3,000 a year. But the benefit to the economy will likely be limited.
Q: How many homeowners will be eligible or will choose to participate?
A: Not entirely clear.
Q: Who will benefit most?
A: Underwater homeowners in the hard-hit states of Arizona, California, Florida and Nevada could be greatly helped. Many are stuck with high mortgage rates after they were approved for mortgages with little or no money as a down payment and few requirements. The average annual savings for a U.S. household would be $2,500, officials say.
Q: When will it start?
A: Fannie and Freddie will issue the full details of the plan lenders and servicers on Nov. 15, officials say. The revamped program could be in place for some lenders as early as Dec. 1.