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Obama Loan Modification / Refinancing Not Working   June 5th, 2009
It wasn't hard to predict... in fact, I did       

 
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The Obama plan to help struggering homeowners has had little or no effect, apparently. Many conservatives, myself included, predicted the plan would fail. It seems to have done just that.

Recall, back in February Obama unveiled his plan to help homeowners.

President Obama's foreclosure prevention plan, to be announced Wednesday in Phoenix, will help some struggling homeowners by providing them with direct government subsidies of interest payments, among a menu of measures, financial industry sources said Tuesday...

Despite the fanfare around the announcement, sources said applicants for assistance will have to meet tough government guidelines to receive it. The standards are intended to discourage financially-healthier homeowners from purposely withholding mortgage payments to try to qualify for government help.


At the time I specifically wrote: "Let me just briefly say that I don't think it'll have a significant impact on foreclosures. The plan seems complicated, filled with caveats, there's no clear indication to homeowners who exactly qualifies."

Then, two months ago, Obama urged homeowners to refinance:

Declaring 'good news' in the midst of an economic meltdown, President Barack Obama on Thursday urged families to take advantage of near-record low mortgage rates by refinancing their home loans.

'We are at a time where people can really take advantage of this,' Obama said, seated with a handful of homeowners who have already lowered their bills.


Well, now, as rates head up to to 5.50% and beyond, it would seem that neither his plan nor his urging people to refinance did much to help.

Neither President Obama's housing program to boost mortgage modifications and refinancing nor rock-bottom loan rates triggered the expected early mortgage bond repayment wave in May, analysts said...

"These prepayment rates were below our expectations," wrote JPMorgan analysts Thursday night. "We had looked for a greater degree of reactivity, given low rates in March/April and the implementation of the Obama plan. Clearly, the plan is having little impact so far."...

Obama's plan to refi loans for up to 9 million troubled homeowners is off to a slow start due to government bureaucracy and the challenge of unwinding Wall Street's bad mortgage bets, James Lockhart, director of the Federal Housing Finance Agency, said on Wednesday.


Considering Geithner's plan to unload toxic assets was basically scrapped two days ago, there isn't much that the Obama administration has proposed to address the financial crisis that has actually been executed or had any real effect on the economy.

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