Aren't you glad we bailed them out? ..... Banksters block plan to help homeowners avoid foreclosure

[marmar]

(Bloomberg) A U.S. program to help as many as 5 million homeowners refinance their mortgages is being hindered by reluctant lenders, suffering a similar fate to the government’s main foreclosure-prevention effort.

The Obama administration introduced the plan in April 2009 in a bid to prevent defaults among borrowers who were current on their payments but had little or no equity after the average home price had tumbled 33 percent since the July 2006 peak. The Home Affordable Refinance Program, known as HARP, was designed to allow these homeowners, who usually can’t qualify for new loans, to benefit from the lower rates engineered by the Federal Reserve to help stimulate the economy.

About 810,000 homeowners refinanced through HARP as of May, according to the Federal Housing Finance Agency, far short of the administration’s goal. The program’s limited impact threatens to prolong the nation’s foreclosure crisis while keeping billions of dollars out of consumers’ hands -- money that could flow into the economy in the form of additional spending or investment.

“Of all the policy ideas to help the housing market in the very near term, juicing up HARP has the most potential for success,” Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said in an e-mail. .............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-08-16/banks-block-obama-on-mortgage-stimulus-plan.html

[midnight]

1. K&R

[valerief]

2. We've got to stop thinking that our tax money is ours. It's theirs. nt

[woo me with science]

3. The Third Way wants to work with Obama to *speed up* foreclosures:

Kudos to DUer chill_wind for posting about this first: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1670652


From their press release page http://www.thirdway.org/in_the_news comes this Cover Story article in the National Journal. (3 pages).

On Jobs, Grand Bargains for Politicians to Get America Back to Work
Remember the unemployed? With the debt limit raised, here’s how to help them.

Updated: August 5, 2011 | 8:20 a.m.
August 4, 2011 | 5:48 p.m.

http://www.nationaljournal.com/magazine/some-possible-grand-bargains-on-jobs-and-unemployment-20110804

....
Stabilize the housing market. Housing, the recovery’s biggest drag, has confounded the White House and Congress, and with good reason. The market is still working through a glut of foreclosures that started with homeowners who bought more than they could afford, and then spread to more-responsible borrowers who lost jobs in the financial crisis. An oversupply of cheap, repossessed homes has helped sink housing prices nationwide to their lowest levels in a decade, adjusted for inflation. Falling values have erased trillions of dollars in wealth for Americans who have kept their houses, spurring consumers to save more and spend less and robbing entrepreneurs of a tried-and-true tool—home-equity loans—for starting or expanding a small business. “You don’t have a very good shot at sustained job growth unless you address the largest factor holding it back, which is demand,” says Robert Shapiro, a former Clinton administration economic adviser who now runs the consulting firm Sonecon. “You can’t get demand going until housing prices stabilize.”

Therein lies another possible bargain: Obama and Republicans could agree to try a double-barreled attempt to get foreclosure rates back to historically normal levels. They could reverse the administration’s recent efforts to slow the foreclosure process for delinquent borrowers and, instead, take steps to shuttle the most-troubled home­owners—the ones who borrowed beyond their means—out of their houses and into rental units as fast as possible. Keith Hennessey, a former economic adviser to President George W. Bush, compares that effort to removing a Band-Aid: “Policies for several years now—including under the administration I worked for—have focused on trying to keep people in their homes,” says Hennessey, now a research fellow at Stanford University’s Hoover Institution. “That stretches out the problem,” pulling the bandage off slowly. Maybe now, he says, it’s time to “rip it off really fast. Stop trying to help keep people who can’t afford to be in their homes stay in their homes.”

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