Politico writes White House’s $50B foreclosure plan a bust so far:
The Democrats’ political and policy fortunes rest on their ability to persuade voters that they’re fixing the economy. But experts say that rising foreclosures will only exacerbate the nation’s economic woes, pushing down home prices
, slashing state and local tax revenues and imperiling consumer confidence.
“Everybody understands that getting out of this broader crisis requires that we stabilize our housing market and stem the tide of foreclosures,” Senate Banking Chairman Chris Dodd (D-Conn.) said in a hearing Thursday. But in unusually harsh words for a Democrat, Dodd said that the Obama administration’s progress in stopping foreclosures has been “disgraceful” so far.
“It’s just hard to explain to the working families in America how it is we could move so fast with extraordinarily complicated deals with the huge financial institutions, and we are moving so incredibly slowly, mired in paperwork, in rules, in talking to banks back home,” said Sen. Jeff Merkley (D-Ore.).
The foreclosure listing service RealtyTrac Inc. reported Thursday that the number of homeowners in foreclosure in the first six months of 2009 was up 15 percent from the same time period a year ago.
The Center for Responsible Lending, a nonpartisan research and policy organization, projects at least 2.4 million additional foreclosure starts this year, causing nearly 70 million surrounding households to lose a combined $500 billion in property value.
The group estimates there will be 9 million foreclosures through the end of 2012, at the cost of $2 trillion in lower home values — enough to pay for the House Democrats’ health care plan, twice.
The White House realizes the stakes. Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan took the 27 participating servicers to task in a July 9 letter to their CEOs, telling them to add more staff, improve training, create an appeal path for borrowers dissatisfied with the service and fulfill other measures to do more modifications, better.
And so the circus continues. Tim Geithner’s solution to a completely failed policy: Throw more bodies on the pile, employ more people. This is, to anyone who is familiar with project management, the number one indicator that a project is failing and that the person in charge has no insight into its fundamental shortcomings and its subtleties. The administration’s policy is failing as expected. Will they admit failure? Of course not. Will they do everything possible to blame the man on the moon for it? Absolutely. Mark my words:
Obama’s ill-conceived foreclosure prevention plan is in the final steps of falling apart. The backlog that the moratorium naturally created, is beginning to flood the market.
It won’t be too long and people will start asking where the $50 billion subsidies for mortgage adjustments went. And then people will start acting surprised when they find out that yet another chunk of taxpayer money went down the drain.