March 5, 2012 by Leave a comment

Don’t confuse hope for a plan

-Michael Lombardi, former NFL executive.

One of my biggest frustrations with our government is the failure to put together any sort of coherent housing plan.  This is a failure of imagination, a failure of governance, and a failure of will.  There is plenty of blame to apportion for this failure, and both parties, the president, and the congress all share some part of it.

It seems to me that the Obama Administration’s housing policy has been to throw a bunch of stuff at the wall to see if any of it sticks (HAMP, HARP, FHA Short Refi, et. al.).  The slew of programs enacted over the past couple of years have generally had glaring flaws, and no clear aim behind them.  I would challenge somebody to fill in the blank in the following sentence: “The goal of the housing policy of the Obama Administration is ___________________.”  Congress doesn’t avoid scrutiny here, our elected officials in this body have shown a complete inability to work together, and manage mostly to produce partisan bickering.

I bring this up because according to a report from E. Scott Reckard and Alejandro Lazo from the Los Angeles Times, we can add the Hardest Hit Fund to the list of failed housing programs:

“A $7.6 billion federal program to help unemployed homeowners stave off foreclosure has provided little relief two years after being unveiled, with less than $218 million of the money paid out to needy borrowers as of Jan. 1.

California, which was allocated nearly $2 billion from the Hardest Hit Fund, provided less than $38.6 million in assistance for the 4,357 borrowers by the end of last year, according to the state’s latest report to the Treasury Department.”

The Hardest Hit Fund was intended to help unemployed homeowners stay current on their mortgage payments while they search for work.  Less than 2% of the funds allocated for the program have been utilized.

The failure of the program is blamed variously on bureaucracy, lack of awareness about the program, lack of efforts to make those who might be eligible about the program, lack of bank participation in the program, and lack of GSE participation in the program, variously.

The housing market peaked more than five years ago, and housing has been in a state of crisis for at least four years.  Still, there is no discernible plan to fix the crisis.  That is a failure by any measure.

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