CNBC reports that the Treasury Department is offering special off-the-record briefings to reporters to give another side to the widely held view that their foreclosure mitigation strategies are completely failing:
Criticism of the Obama Administration’s mortgage bailout, the Home Affordable Modification Program, is reaching a fever pitch, and I know this because, among other things, the Administration itself appears to be mounting a defense.
Recently, reporters who cover housing were called to the Treasury Department for a “background briefing” by Administration officials, who tried to focus attention on the many, varied Administration efforts to stabilize housing; the message was…it’s not all about our modification program.
Yesterday I received several emailed announcements from both HUD and the Treasury. One alerted us to a “Conference on the Future of Housing Finance,” set for quite possibly the slowest news week near the end of August.
I got that announcement as well. And while it has appeared to pay off – witness this takeout today on the future of Fannie and Freddie by Zachary Goldfarb – it’s orthogonal to the current crisis of record foreclosures. I think Fannie and Freddie need to be completely rethought, too, but that’s prospective and says nothing about how you keep people in their homes.
As for the background briefing on all the other ways the Administration has stabilized the housing market, you know who won’t buy that? Human beings, especially ones on the front lines of this crisis:
Tomorrow President Obama will be speaking at the Urban League conference at the Washington DC Convention Center. This is the same venue where the NACA 8-Day foreclosure prevention event is still going on. We were there last Friday, as thousands of borrowers lined up overnight to try to get mortgage modifications under the NACA agreement with lenders.
Today NACA’s chief, Bruce Marks, announced they would hold a protest as the President arrives at the Convention Center tomorrow. “Over a thousand homeowners will urge President Obama to advocate for homeowners…Homeowners from around the country say that President Obama’s Making Home Affordable plan has not helped the vast majority of homeowners in trouble with their loans and does not go far enough by excluding FHA backed loans.”
What’s so interesting about this event is that I’m guessing the bulk of the protestors are overall Obama supporters. The majority of NACA employees and volunteers are minorities and largely Democrats. Bruce Marks says he voted for Obama and supported him. This will be the first large-scale, organized protest of the Administration’s housing bailout, and given who is protesting, it will be hard for the President to ignore.
While the idea of a “housing bailout” is a ridiculous distortion of the term “bailout,” this is exactly what I was talking about when I said that HAMP is hurting liberalism. Precisely the people most disposed to vote for President Obama and Democrats are precisely the people being abused by this government program, because it’s not designed for them, despite the claims to the contrary. It’s designed to help banks, from a public image standpoint and from a toxic asset standpoint. It doesn’t force the banks to deal with the problems on their balance sheet, it doesn’t force a haircut on them so borrowers don’t get consumed in the crisis, it basically allows them to extend and pretend, extracting a few extra payments from the borrowers in the exchange.
I’ve started talking to people who are in this predicament, who have been told to make trial payments before a principal modification, only to see their applications for that modification denied. They’re angry and hurt and confused, even if they’re still fighting. The bottom line is that if these people’s problems aren’t resolved, you won’t have a housing recovery, you won’t have a lending recovery, you won’t have a construction recovery, and ultimately you won’t have an economic recovery. So background briefings aren’t going to ameliorate this mess as much as a total overhaul of this legalized gouging.




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Lots of shameless media propaganda abounds (“They’re building again in Vegas!). Hyped pending sales numbers on front page, corrected numbers buried. Tales of wild bidding wars for REOs, wars won by cash buyers. Hmmm, who are they? I don’t know any real investors who think real estate has bottomed out, and the prices paid for these REOs not justified from a cash flow standpoint. Weird shit going on.
My brother tried to use the HAMP program and got a complete runaround. Dare we use the cliche “Kafkaesque”? Yes, it’s appropriate here.
Yep – distressed homeowners are all Gregor Samsa now.
Why give any “off the record” interviews to any journalists on such a high-profile, big stakes, so far weak program. If this administration spent half as much time developing and implementing credible policy as it does on Rove-like PR, we’d all be ahead of the game, and Obama would be climbing in the polls, which, I imagine, is what all this PR is about.
Again, if a lender has no down side, and considerable up side, from refusing voluntarily to renegotiate a troubled consumer loan, it won’t renegotiate. That’s not news to anyone capable of gainful employment insdie the Beltway, whether they live in DC, NW or SE. So why tout such a voluntary program?
The program should rightfully be called HAMPER; in both senses that it hampers the homeowners ability to keep the home, and also belongs with the dirty laundry.
They need to lower th interest rates on these mortgages, not reduce the principal of the loan. Needless propaganda…
& what exactly would that do ?
Paying 2% or whatever interest on property that is 2x greater than it’s real value is still a ripoff.
They need to reduce the principal on mortgages to reflect their true value.
Succinct and right on target.
Generally their “principal reductions” are simply added on to the end of the loan as a balloon payment. They are not going to voluntarily eat principal. See my diary on the NACA event: seminal.firedoglake.com/diary/61718
We should change the name to HAMPER!