A heck of a headline…with no teeth

Barack Obama

By Rodney Carey

In reference to President Barack Obama’s recent announcement about reforming the housing industry…

I’m sorry to say, but this is going to be another failed attempt, which will further delay any chance of recovery. What the administration proposes is great for generating headlines, but does nothing to fix the housing problem.

First reason: this proposal excludes 80% of the existing mortgages because the GSEs (Freddie Mac, Fannie Mae, FHA and others) are excluded. Secondly, any mortgage that is “securitized” will most likely not be eligible which leaves only the mortgages actually OWNED by the banks not just serviced. So the help will go to such a small group of borrowers, many of whom may not even take the government up on its offer of assistance.

Let’s face it. This is an election year, and while our ailing housing industry did not get this way due to anything our President did, he inherited a huge problem which can be solved if someone with some spine stands up to the task.

The way out of our housing slump is NOT to try to please everyone nor tiptoe around anything. Every single governmental proposal to aid housing has done the exact opposite, which delays the recovery and prevents the market from working on its own.

Lastly, everything overlaps. HARP 2, the robo-signing settlement, President Obama’s big brilliant plan. They all say the same thing, elbowing each other out of the discussion, resulting in a lot of hot air doing nothing of substance for ailing homeowners. Each of these plans is better classified as an economic stimulus plan rather than a housing stimulus plan because they continue to only help those that are MAKING their payments not those that are struggling to make their payments.  Saying that you are helping out homeowners is just better stumping because providing “economic stimulus” has become a dirty word.

The more we limit the possibilities for the truly struggling home owner to get on their feet and back in the game, the longer we delay a recovery. And every single proposal on the table does a great job of eliminating the people who truly need and want help out of the equation.