Obama’s “New” Housing Policies Skip Rinse, Go Straight to Repeating Failure

February 1, 2012

Democrats’ Latest Attempt to Address Housing Crisis is More of the Same Failed Strategy We’ve Seen Flounder for Three Years

Housing data released this week continued to show the housing market in shambles as home prices continue to dip even though many families remain underwater on their mortgages and struggling to stay afloat.
Amidst this housing crisis, President Obama today is resorting to a tried and worn tactic of announcing a “new” plan to address housing.
One problem: Obama’s “new” strategy is exactly the same as the failed housing strategies he’s been pushing for the last three years.

Housing data released this week continued to show the housing market in shambles as home prices continue to dip even though many families remain underwater on their mortgages and struggling to stay afloat:

THE CRUEL PRICE OF DEMOCRATS’ FAILURE: LAS VEGAS HOUSING PRICES SINK TO 1997 LEVELS, EXPECTED TO CONTINUE SINKING THROUGH 2013:“Las Vegas-area home prices fell in November to a level last seen 15 years ago and will likely keep dropping through late 2013, new housing data show.”(Steven Green, “Las Vegas Home Prices Sink to 1997 Level, Standard & Poor’s Reports,” Las Vegas Inc, 1/31/2012)

“HOME PRICES FALL FOR THIRD STRAIGHT MONTH: CASE-SHILLER”: “U.S. home prices fell for a third straight month in nearly all cities tracked by a major index. The declines show that most homeowners are not reaping the benefits from some signs of an improving housing market.” (“Home Prices Fall for Third Straight Month: Case-Shiller,” Associated Press, 1/31/2012)

HOME PRICES SANK IN 19 OUT OF 20 MAJOR U.S. CITIES: “The Standard & Poor’s/Case-Shiller home-price index shows prices dropped in November from October in 19 of the 20 cities tracked.” (“Home Prices Fall for Third Straight Month: Case-Shiller,” Associated Press, 1/31/2012)

Amidst this housing crisis, President Obama today is resorting to a tried and worn tactic of announcing a “new” plan to address housing:

“OBAMA WANTS CONGRESS TO ACT ON EXPANDED MORTGAGE REFINANCE PLAN”: (Jim Kuhnhenn, “Obama Wants Congress to Act on Expanded Mortgage Refinance Plan,” Associated Press, 2/1/2012)

CHIEF ECONOMIST AT TRULIA: OBAMA’S NEW HOUSING PLAN IS JUST MORE “STIMULUS,” “WON’T IMPACT THE HOUSING MARKET MUCH”: “‘This is primarily economic stimulus,’ Kolko said. ‘It puts money in the pockets of people with mortgages. It won’t impact the housing market much. Underwater borrowers will remain underwater, and you need to be current on your payments to refinance.'” (Alejandro Lazo, “Obama Takes Aim at Housing Bust in State of the Union Speech,” Los Angeles Times, 1/24/2012)

One problem: Obama’s “new” strategy is exactly the same as the failed housing strategies he’s been pushing for the last three years:

OBAMA’S PREVIOUS HOUSING PROGRAMS HAVE FAILED SO BADLY, EVEN OBAMA HAD TO ADMIT IT: “In announcing the program, the president acknowledged that the administration’s previous attempts to help struggling homeowners hadn’t worked as intended.” (Russell Berman, “Boehner Unimpressed with Obama Housing Proposal,” The Hill, 2/1/2012)

12 MILLION HOMEOWNERS ARE CURRENTLY UNDERWATER ON THEIR MORTGAGES: “Currently, about 12 million homeowners are underwater on their mortgages … more than one out of five homes with a mortgage. In states experiencing the largest overall house price declines such as Nevada, Arizona, and Florida—roughly half of all mortgage borrowers are underwater on their loans.” (John K. McIlwain, “3 Ideas to Fix the U.S. Housing Markets,” The Atlantic, 2/1/2012)

THE LAST REFINANCING PLAN FROM OBAMA HELPED FEWER THAN 1,000 HOMEOWNERS, AKA 0.008%: “In 2010, for example, the Obama administration rolled out a program to let underwater borrowers refinance through the FHA, but that program required banks to first write down loan balances so that borrowers could qualify under existing rules. Fewer than 1,000 loans have refinanced through the program.” (Nick Timiraos, “Six Questions on Obama’s Mortgage Refinance Proposal,” The Wall Street Journal, 1/25/2012)

2.5 MILLION HOMES HAVE BEEN FORECLOSED SINCE 2009, 4 MILLION MORE ON THE VERGE: “Meanwhile, 2.5 million homes have been lost to foreclosure since 2009, an additional 4 million are in the foreclosure process or seriously delinquent, and home prices are still falling in much of the U.S., shrinking household wealth for millions of Americans.” (Julie Schmit, “What Went Wrong With Foreclosure Aid Programs?”, USA Today, 12/12/2011)

OBAMA’S PREVIOUS HOUSING PLANS CONSTITUTE A VERITABLE “MOSAIC”: “The proposal, to be released in the coming weeks, is the latest addition to a mosaic of Obama administration programs aimed at boosting the housing market, which is entering its fourth year of weak sales and high foreclosures.”(Lorraine Woellert, “Obama Pushes Proposal to Streamline Refinancing for Homeowners,”Bloomberg, 1/25/2012)

“ALPHABET SOUP” OF PAST OBAMA HOUSING PROGRAMS: “HAMP, HARP, EHLP, 2MP”… HUH?: “That’s a big if, given that the alphabet soup of housing assistance programs to date — HAMP, HARP, EHLP, 2MP — have been too poorly administered and too limited in scope and eligibility to slow or halt the slide in the U.S. housing market.” (Eric Wieffering, “Fixing Economy Requires More Work on Housing,” Minneapolis Star Tribune, 9/17/2011)

BUT WHAT THEY ALL HAVE IN COMMON IS THAT “EVERY PROGRAM HAS FALLEN SHORT OF GOALS”: ” ‘Every program has fallen far short of goals. I can’t think of one that’s been largely successful,’ says John Dodds, director of the Philadelphia Unemployment Project, a non-profit that’s been involved in foreclosure prevention for decades.” (Julie Schmit, “What Went Wrong With Foreclosure Aid Programs?”, USA Today, 12/12/2011)

OBAMA HOUSING PROGRAMS “FALL FAR SHORT OF GOALS,” HELPING ONLY A FRACTION OF THOSE INTENDED: “President Obama pledged at the beginning of his term to boost the nation’s crippled housing market and help as many as 9 million homeowners avoid losing their homes to foreclosure.Nearly three years later, it hasn’t worked out. Obama has spent just $2.4 billion of the $50 billion he promised. The initiatives he announced have helped 1.7 million people. Housing prices remain near a crisis low. Millions of people are deeply indebted, owing more than their properties are worth, and many have lost their homes to foreclosure or are likely to do so.” (Zachary A. Goldfarb, “Obama’s Efforts to Aid Homeowners, Boost Housing Market Fall Far Short of Goals,” The Washington Post, 10/23/2011)