The Failure of Obama’s “Making Home Affordable” Program
Tags: Obama Depression.
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About 25 percent of borrowers helped under the administration’s massive foreclosure prevention plan have already fallen behind on their new mortgage payments, according to government data that raise new questions about the program’s effectiveness.
The delinquency figures reflect the latest troubles of the program, known as Making Home Affordable. Earlier this week, Treasury officials announced a campaign to put new pressure on lenders to do more to move struggling homeowners into loans with easier terms.
So far, more than 650,000 borrowers have been enrolled into the initial, or “trial,” phase of the program…
Why isn’t it working? Because for someone who loses their job, no modification will work. For someone who is massively “underwater” on their loan, lowering the payment doesn’t change the overall financial picture.
As I’ve been saying for a while, the only way out of this housing mess is to send America’s housing market it to bankruptcy reorganization. Its a big, old poop sandwich and everyone is going to have to take a bite. For those out there of an entirely ungenerous view – those who are employed and not underwater and are insisting that everyone just sink or swim – we can give you some tax breaks, or something, if you need a bribe to just agree to people being helped in a manner which does no immediate harm to you and will help you, in the long run (by sustaining housing at its current value, thus ensuring you don’t lose any of your existing equity).
Some people will have to lose their homes – the assistance, for them, should take the form of helping them to easily go through foreclosure/short sale and in to a rental property. For those who will keep their homes but who are underwater, it should take the form of reducing the principle balance to fair market value – which will be a huge loss to those who have paid for years and will now lose all the money they’ve paid to date; this will also be a hard hit on the banks, but at least everyone will know what the real value of their loan portfolio is, and the fear of a massive, new wave of foreclosures will recede.
My dear, fellow Americans – we borrowed ourselves in to oblivion and in the process massively over-inflated the value of our real assets, most especially our real estate. Its time to suck all the gas out of the bag and start afresh. Or, we can just let things fall apart even more – more people to lose their homes or just walk away from them, more banks going under, more jobs to be lost…its our choice.
Thank you for visiting Blogs For Victory. If you enjoy our content, please consider making a donation to help us cover the costs of our servers.Mark Noonan is co-author (with Matt Margolis) of Caucus of Corruption: The Truth About The New Democratic Majority. He also blogs at Nevada News and Views. Follow Mark on Twitter.
6 Responses to “The Failure of Obama’s “Making Home Affordable” Program”
Caucus of Corruption
OT Mark, but we need another thread on Afghanistan. The same Donkaroach congresscritters who were on President Bush’s ass about “exit strategy” and “timelines” are now criticizing Earbama for having those things.
Plus, Earbama doesn’t have the stomach for war. Violence in Iraq picked up in January when the narcissist in chief took office. Coincidence? Hardly.
Also, Earbama’s favorite word: unprecedented. His favorite phrase: “Let me be clear.”
It will be interesting to see what happens to home loans in the next year or so. I realize that in some areas the mortgages are so far out of line with the current valuations.
A little OT, it would be nice if the local governments would reduce current home valuations to be more in line with the actual values. My house is worth 85k at most, but the valuation is currently 100k. Now mind you, my house is still in the process of being fixed up, and my valuation appeal was denied, because of what was considered the neighborhood values. Even though houses in the neighborhood are not selling for what they are valued at any more.
the value of homes dropped about 40% in my neck of the woods so far this year…a 200k home is now appraising at 120k…that trend is not going to change…i dont see a real stablization in real estate values until banks also adjust loans to accomodate the devaluation of the properties in question…
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most of the overvaluation we have seen never actually existed to start with…it was created by mortgage companies…real estate brokerages…and mortgage brokerages…and the real estate assessment industry played right along with them…banks and agents from all corners of the nation sought out assessment companies that would give them high valuations on property to increase the commissions that they were awarded when the properties closed…the actual guilty people are walking away from this situation scott-free…and the people they victimized with thier false estimations of value are further victimized because thier tax dollars are being handed over to the banks that perpetrated the scandal to begin with…
its criminal…and it runs right up to DC…
In Indiana our property assessments are done every two years. My current assessment reflects the value in 2007/2008. The one I receive sometime next year will reflect 2009/2010. The assessments are SUPPOSED to reflect actual market value, but I have always wondered if that was true. If our current assessment is accurate, our house hasn’t appreciated in value in the 12 years since we built it. Our neighbors recently had a bank appraisal done in order to borrow more on their home equity line of credit, and the appraisal was about 25% higher than their property tax appraisal. My guess is that JS02’s comment that higher values were largely a product of over-assessments by the mortgage industry is correct. Fortunately for us, our house is almost paid for.
government has no basis in assessing market value…market value is based on speculation…government tax assessments should only be based on real world value…the costs of brick and mortar…not hope…not a gamble on profit…but facts…
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but that is another battle…
We got into this economic mess because the government fiddled with housing and finance, so their solution is to fiddle with housing and finance?
Oh, that’s right—the problem was that they didn’t do ENOUGH to fiddle with housing and finance, so the answer is to step up the efforts to impose even MORE social engineering experimentation. Isn’t that always the excuse given by the RRL when their socialist efforst fail?