Obama Housing Plan: New & Different or Same Old, Same Old ???
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Despite the fact that it was the lead story on the NYTimes website all day Friday, and then followed on Saturday by a “News Analysis” calling it “Bold”,
Despite the fact that it was the lead story on the NYTimes website all day Friday, and then followed on Saturday by a “News Analysis” calling it “Bold”,
Despite the fact that it was the lead story on the NYTimes website all day Friday, and then followed on Saturday by a “News Analysis” calling it “Bold”,
it’s a bit hard to tell how SIGNIFICANTLY it differs from the Administration’s previous plan, which was, to put it mildly, not a huge success.
[quote]It is a balancing act in numerous ways. If the plan falls short — and some experts were skeptical on Friday — the Obama administration could find itself having to start over yet again in six months or a year….
The latest programs, together with foreclosure assistance efforts already in place, are aimed at helping as many as four million embattled owners keep their houses.
But the measures, which will take as long as six months to put into practice, might easily fall victim to some of the conflicting interests that have bedeviled efforts to date.
None of these programs have the force of law, and lenders have often seen no good reason to participate.
[/quote]which has been a big part of the problem … [br]
There are three different “programs,” as announced by Federal Housing Administration head David Stevens,
and, as usual with Obama plans, the whole thing involves a lot of middlemen, and has a generally Rube Goldberg air to it all …
[quote]Numerous parties will have to work together to make these deals fly.
The primary loan might have been bundled into a pool and sold to investors during the housing boom.
The investor must agree to cut the principal balance for a deal to work,
and any bank holding a second mortgage on the property would have to go along, too.
[/quote]And, as we’ve pointed out before, it’s often the second lien holder that gets in the way, not having much of an incentive to go along with any re-structuring.
[quote]The only incentive for the first lien holder is a quick exit from a loan that might ultimately default.
Payments for second lien holders will be made on a sliding scale.
[/quote]which, of course, isn’t likely to make them any more willing to go along with “the plan” – whatever it is … 😉 …
[quote]Early reaction to the refinance program among lending groups was less than enthusiastic.
“The magnitude of this program will likely be measured in the tens of thousands rather than the hundreds of thousands of borrowers,” said Tom Deutsch, executive director of the American Securitization Forum. Both banks and investors belong to the forum.
The Mortgage Bankers Association, which represents the banks that service the primary loans and own outright many of the secondary loans,
warned that “each servicer will need to determine whether this is the best approach to help the individual borrower.”
[/quote]or is “the best approach to help the individual LENDER” ??? 😉 …
As Fox News USED to say – until they got rid of the pretense of being anything but a right-wing echo chamber – you decide 😉
But here’s one expert whose dominant metaphor doesn’t sound too hopeful:
[quote]“The housing market is the Vietnam War of the American financial system,” said Howard Glaser, a housing consultant. “The federal government is in so deep, they have to keep ramping up to find a way out.”
[/quote]Doesn’t sound too hopeful, does it 😉 ???
