Congressman Cardoza discusses his Housing Opportunity and Mortgage Equity (HOME) Act on MSNBC. This interview is in anticipation of President Obama's upcoming jobs speech Thursday, September 8, 2011.
The transcript is below:
MSNBC Anchor Alex Witt: The latest jobs report showing zero growth is unacceptable, and on Thursday [President Obama] will lay out his plan for putting Americans back to work in a nationally televised speech. The current jobs crisis started after a major meltdown in housing and this past week, reports surfaced that the Obama Administration was considering a new plan to reduce foreclosures. I am joined live by Dennis Cardoza of California. Good Sunday morning to you, thanks for joining me.
Congressman Dennis Cardoza: Good morning, Alex.
AW: I want to talk, first of all, about your area. You represent Merced, Modesto Stockton area—the area in central California consistently ranks among the top ten of the hardest-hit cities in the nation. What's it like in your backyard?
DC: We've been devastated. I represent hard-working Americans that started out with subprime loans, but it's gone to the general population and 60% of our homeowners are underwater on their mortgages.
AW: 60%, wow.
DC: 12% are behind, 90 days or more in paying their mortgage. That equates with America, where 8 % are behind and nearly 25% of Americans are under water on their mortgages currently.
AW: Okay, you have your own plan to address the housing crisis, to try to help with employment, as if there's a domino effect here. Explain this connection and what you want do.
DC: I believe we're not going to get over the employment crisis until we deal with the housing crisis. There's a crisis of confidence in America, people aren't going to want to spend money if their house is under water or at risk of foreclosure. I believe we need to help people refinance mortgages. I have a proposal to do that. Right now 25% of Americans are locked in, they can't go to their bank and refinance because they don't have enough equity. My proposal would allow government-backed mortgages, ones that we already are responsible for if they foreclose, would allow them to refinance without an appraisal—at the same amount that we already guarantee. And lower their payments from the 7% payment to the 4% area, extend it for 40 years, reduce payments and keep people in their houses.
AW: You would keep it at low single digit rates none of the variables?
DC: That's right.
AW: In Washington, with your plan, what is the feedback from your colleagues?
DC: Well, a number of my colleagues in the House are very supportive. Senator Boxer has a similar measure in the Senate. We believe that this could pass, but it needs the President to come forward very strongly and advocate for this kind of solution, as well. The programs the administration has put forward to date have not worked at all, and we need some real movement here and I'm looking for it in his speech Thursday night.
AW: Can you give please give a sense of how many jobs might be created were the housing market bounce back?
DC: Well, Moody's and others have done studies about my proposal and it is the equivalent of a tax cut of $50 to $85 billion. I think that we all talk about how stimulative tax cuts can be. That kind of impetus is stimulus to the economy, I think would be just what the doctor ordered to get the economy moving again.
AW: Why do you think it has taken so long? I mean, people, if you look at the economic advisers and analysts, way back at the beginning in 2008, they were saying the housing market is the epicenter of all of the problem. We're pushing three years now since this thing started.
DC: Well, let me tell you about something that happened this week in the halls of Congress. I ran into a lobbyist from the financial services industry and he didn't like my bill because his bond holders would have to go from 7% interest that they're currently receiving, to 4%. And, I said, isn't that people's right to refinance and get a better mortgage for themselves? He said, look, we've been making business decisions based on 7%, we don't want you to let people get a 4% mortgage instead. Frankly, I'm not worried about Wall Street. I'm worried about average Americans who are trying to save their house, keep their family together in the home, live the American dream. That's what I care about, not the bankers on Wall Street.
AW: Democratic Congressman Dennis Cardoza of California, good luck. Thanks for speaking with us.
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