Foreclosure Nightmare: Obama’s $75 Billion Homeowners Program Has Done “More Harm Than Good”
Posted By Vicki McClure Davidson on January 4, 2010
Obama's program to help home owners has done more harm than good
In a free market society, government intervention usually hinders or makes a mess of economic recovery. I use the word “usually” to account for the maybe-perhaps, potentially existing one in a zillion times that it hasn’t royally screwed up the natural economic recovery process of balancing and taking care of itself, by itself.
Pres. Obama’s attempts to manipulate the American economic crisis have crashed and burned again… this time, with the billions of taxpayers’ dollars that he pumped into the housing loan market to prevent foreclosures and help desperate, unemployed, hard-working Americans. But didn’t.
From New York Times, U.S. Loan Effort Is Seen as Adding to Housing Woes:
By Peter S. Goodman
January 1, 2009The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.
Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.
As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.
Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system.
“The choice we appear to be making is trying to modify our way out of this, which has the effect of lengthening the crisis,” said Kevin Katari, managing member of Watershed Asset Management, a San Francisco-based hedge fund. “We have simply slowed the foreclosure pipeline, with people staying in houses they are ultimately not going to be able to afford anyway.”
[...]
Whatever the merits of its plans, the administration has clearly failed to reverse the foreclosure crisis.
In 2008, more than 1.7 million homes were “lost” through foreclosures, short sales or deeds in lieu of foreclosure, according to Moody’s Economy.com. Last year, more than two million homes were lost, and Economy.com expects that this year’s number will swell to 2.4 million.
“I don’t think there’s any way for Treasury to tweak their plan, or to cajole, pressure or entice servicers to do more to address the crisis,” said Mark Zandi, chief economist at Moody’s Economy.com. “For some folks, it is doing more harm than good, because ultimately, at the end of the day, they are going back into the foreclosure morass.”
Just a reminder from Gateway Pundit about our Socialist in Chief’s speech from back in February 2009: Barack Obama: “We Must All Learn to Live Within Our Means Again”:
Excuse me?
Didn’t Obama just sign the largest spending bill in history?… Yesterday?
Moldova reported on “Obama’s remarks on foreclosure prevention”:
So solving this crisis will require more than resources – it will require all of us to take responsibility. Government must take responsibility for setting rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. Individuals must take responsibility for their own actions. And all of us must learn to live within our means again.
These are the values that have defined this nation. These are values that have given substance to our faith in the American Dream. And these are the values that we must restore now at this defining moment.
Must-see video: Steven Crowder in Detroit: Going Ghetto (video)
Related reading:
Frugal Café Blog Zone: Homes Selling for a Dollar in Chicago? No Thanks, Not Interested and Darrell Issa to Rahm Emanuel on Stimulus/Porkulus Criticism: “Back Off! This Isn’t Chicago…” and Majority of Americans Demand ‘Cancel the Porkulus Package Now’ and Polls: Majority of Americans Prefer Free Market Economy, Rank Obama Lowest of All Presidents in Job Approval (video) and Obama’s Strategy of Lying about His Failing Economic Policies Is Backfiring
Gateway Pundit: How’s That Hopenchange Feel Now? Youth Unemployment Surges to Record High and Fannie Mae & Freddie Mac Execs Get Up to $6 Million in Pay and Thanks Barack. Hunger and Homelessness Spread In US Under Obama and Obama Administration Approves of ACORN Funding and Stimulus Cash Went to Nonexistent Zip Code Areas, Too and Jobs, Jobs, Jobs… Obama’s Biggest Failure in 2009 (Video) and Change! Obama’s Monthly Deficit Tops Bush’s Yearly Deficit
Michelle Malkin: Baltimore: Our city sucks and it’s all Wells Fargo’s fault
GayPatriot: No, Virginia, Liberal Intellectuals Do Not Learn from Experience
Derrick Roach, Big Government: ACORN Document Dump: Citibank Jeopardizes Customers for ACORN
Tai-Chi Policy: Hmm, Detroit, San Francisco, Baltimore, California…
Doug O’Brien, Big Government: More Stimulus Math: Cooking the Books on Stimulus Jobs
The Powers That Be: Detroit: An Examination of Liberalism in Action and Common Sense Inaction and Unemployment Stimulated Again
Mackinac Center: Citizens, Investors and Legislative Circus Poodles
Conservative Nation: There’s No Winning The Race Hustle
About the author
[...] This post was mentioned on Twitter by Nikos Biris, Palin Twibe. Palin Twibe said: Frugal Cafe': Foreclosure Nightmare: Obama’s $75 Billion Homeowners Program Has.. http://tinyurl.com/yaw9qsg #palin #tcot [...]