Wednesday, February 1, 2012

It must be election season as Obama brings out another fail mortgage program

Here we go again.  The Housing markets is still in freefall, and foreclosures are going to accelerate in 2012 as judicial rulings against homeowners in late 2011 open the door for the banks to take property without a note.  So what does President Obama choose to do about this for the American people?

Wait for it...

A new mortgage refinance program.

Yes, President Obama will seek to institute his third refinance program in three years, and like the other two his administration produced, the results will again be an Epic Fail.

In his State of the Union address, President Obama laid out a Blueprint for an America Built to Last, calling for action to help responsible borrowers and support a housing market recovery. While the government cannot fix the housing market on its own, the President believes that responsible homeowners should not have to sit and wait for the market to hit bottom to get relief when there are measures at hand that can make a meaningful difference, including allowing these homeowners to save thousands of dollars by refinancing at today’s low interest rates. – White

We hesitate to count off all the ways this new program is meaningless and will accomplish little for the American people who still own property that is worth less than they owe on it.  However, the most important thing to remember is:

Interest rates have been at historic lows for three years, and those that could refinance, did refinance.  Those that could not, did not.

The only way the government and the President could help the American people is to do what President Bush should have done in 2008 during the credit crisis... pay off most of the real estate debt, and mortgages to the banks.  This would have seriously helped people keep thier homes, while at the same time, infused trillions of dollars into the insolvent banks.  But of course we know that the Fed and taxpayers simply gave trillions to the banks, bypassing the American consumer, and they still were foreclosed upon by these institutions.

Three to four years after the crash of the Housing bubble will do little to really help those who are having trouble paying their mortgages.  The government can say and do all they want, but the banks are not lending, they are not refinancing, and no government program, without the power to punish banks that do not participate, is simply campaign rhetoric, for which President Obama is the master of.


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