Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Jan 27, 2012

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The State of the Union address that aired this past Tuesday on January 24, 2012 brought forth a plethora of new propositions, bill requests, and encouragement from the president of the United States. Much was spoken about the lending industry—ranging from student financing concerns to the success of the bailed out auto industry—but one group should be very happy: home mortgage loan borrowers.

As the audience stood up and sat back down, over and over, throughout the 65-minute speech, President Obama made one thing perfectly clear: he wants forward movement and understands both democrats and republicans must be happy in order to fulfill that desire. Assuming this speech was made sincerely, and not simply to win favor for the soon-approaching election, President Obama truly does deserve a standing applause.

“The construction industry was one of the hardest hit when the housing bubble burst,” started the president. “Of course construction workers weren’t the only ones who were hurt—so were millions of innocent Americans who’ve seen their home values decline.”

Declines in property values have proven to be the nation’s most detrimental economic illness over the last five years. They have flipped mortgage loans upside down, and plunged millions of homes into an icy underwater sea.

But the State of the Union speech brings new hope.

“While government can’t fix the problem on its own, responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief,” said President Obama, “And that’s why I’m sending this congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage by refinancing at historically low rates.”

While this is simply a proposal, and has yet to be made into a bill, if all goes according to the president’s plan, it may not be too far-fetched of an idea. Conservatives most likely responded with a cringe, thinking hard about what that would cost the nation in more tax hikes, but the president preemptively responded with an idea for how his home loan reduction plan would be funded.

“A small fee on the largest financial institutions will ensure that it won’t add to the deficit,” he explained. “And will give those banks that were rescued by taxpayers a chance to repay a deficit of trust,” a comment that earned him not only a standing ovation, but passionate cheers.

Aside from making comments that would win over his mortgage loan borrowing audience, he made it a point to unite the two parties by not pinning blame on either one—or on either of the scapegoats both parties use in their own daily speech.

“We’ve all paid the price for lenders who sold mortgages to people who couldn’t afford them, and buyers who knew they couldn’t afford them,” said the President Obama. “That’s why we need smart regulations: to prevent irresponsible behavior. If you are a mortgage lender, or a payday lender, or a credit card company, the days of signing people up for products they can’t afford with confusing forms and deceptive practices… those days are over.”

Then citing the newly appointed director of the Consumer Protection Financial Bureau (CFPB), Richard Cordray, the president reassured the nation that the CFPB would look out for them.

Finally, he wrapped up his segment on mortgage loans by quoting one of the most famous republican presidents of all time.

“I’m a democrat,” started President Obama, “But I believe what Republican Abraham Lincoln believed: ‘The Government should do for people only what they cannot do better by themselves and no more.’”

As both republicans and democrats erupted in applause, President Obama seemed to very successfully bring the two parties together in this hopeful proposition to address the ailing home loan community.

Mortgage Loan Segment Begins at 35:30.