Will new housing programs cut foreclosures?

Record foreclosures and high unemployment have combined to clobber the housing market.

Now, the Obama administration says it will launch two new programs to try to improve the situation.

Housing and Urban Development Secretary Shaun Donovan said that his department in the coming weeks will roll out an FHA refinancing program to help borrowers whose mortgages exceed the market value of their homes, the Associated Press reports.

Donovan also said his department will launch “an emergency homeowners loan program” to help people who are unemployed keep their homes, AP writes.

There are no details yet. But previous programs by the administration have done little to stem the tide of foreclosures. In metro Atlanta, they have been running at a record pace.

Do you think this will be more of the same? Too little too late?

Or finally, might these programs end up doing what the previous ones failed to do?

What else might work?

For instant updates, follow me on Twitter.

39 comments Add your comment

[...] Will new housing programs cut foreclosures?Atlanta Journal Constitution (blog)But previous programs by the administration have done little to stem the tide of foreclosures. In metro Atlanta, they have been running at a record pace. …Obama Plans Refinancing Aid, Loans for Jobless Homeowners, HUD Chief SaysBloombergHousing Secretary: Homebuyer tax credit on the tableThe Hill (blog)2 new programs planned to help homeownersYahoo! Techall 371 news articles » [...]

The Economy

August 30th, 2010
7:52 am

Not much, with out jobs homeowners will fall right back into default.

dave swanson

August 30th, 2010
7:55 am

The problem with all the programs has been that the principle has not been reduced to current market value.
The making home affordable program was worthless because it didn’t reduce principle.

A.S.Mathew

August 30th, 2010
8:04 am

It is not going to make any dent, because without job, how long the government can help the
homeowners? Let the Feerderal government mandate a law and tell the banks not to bother the
defaulted homeowners for certain time limit. Financial institutions with their battalion of lawyers
will be bothering the homeowners or customers with packets of legal notices.

The financial institutations are to be blamed mainly for this economic crisis. To make outright
profit, they gave loan to millions of unqualified borrowers without looking to their ability to pay,
now the ship is sinking. Banks gave credit card to any Dick and Harry, then charged exorbitant
intereset rate and late charges without any mercy, now that has became another trap for both parties. Atleast, can we learn a lesson of living within our means, and totally avoiding living in
debt if at all possible. I used to charge hundreds of dollars worth of goods, but I don’t charge
anything but pay by cash, and my life is going in the same speed as I did earlier, and more
space at home.

mike S

August 30th, 2010
8:24 am

The problem is you’ve got bunch of people, who should never have been buying a home to begin with, pushed into home ownership by an extremely aggressive mortgage market. These programs might provide temporary help, but it will do nothing long-term.

Bone

August 30th, 2010
8:25 am

People are the problem with the housing market. People borrow too much money for a home they can’t afford and never read the fine print of what will happen if they don’t make their loan payment.

As to credit cards, I’m one of these people that placed too much on their card and now have to pay the price, since I didn’t read the fine print of what was being charged by the banks. Don’t just blame the banks for all of this…pass the blame to yourselves.

Bone

August 30th, 2010
8:29 am

BTW…the picture of the guy with the sign that states, “Housing is a Human Right” is an idiot. Never saw in the Constitution an Amendment that states “Right to Housing”.

Yllek

August 30th, 2010
8:31 am

Mr. Swanson said it best. The drag on the housing market now is the 90% of folks who have jobs but whose home values are well below market value. In many cases, it will take a decade or longer for homes to regain their values. Since banks are not willing to work with people who are current on their mortgages despite the tremendous depreciation in home values, people will walk away from these money pits as better job opportunities arise. People say renting is always an option; however, I’d personally rather take a hit on my credit for seven years than be forced to be a landlord for a decade or longer.

joe

August 30th, 2010
8:42 am

The sign the old dude displayed says “Housing is a human right.” Really? Since when?? If it is a “human right”, I’m sure that right doesn’t include taking out a loan for $200,000, when you can only afford a mortgage payment of $500 per month, then crying for a government handout when you get foreclosed on. This is precisely what is wrong with America today. If you can’t afford a mortgage payment, rent someplace. If you cannot afford kids, keep your pants on.

RTD

August 30th, 2010
8:45 am

My question is when do responsibilities begin? We are all about our rights, but not about our responsibilities. The victim syndrome has got to end in this country.

In Gold We Trust

August 30th, 2010
8:49 am

A “RIGHT” for someone demands the loss of rights for another. If housing is a RIGHT, then that means that someone else MUST be forced to sell to this person, must be forced to give up their money to pay for this person, must be forced to build a home for this person, etc.

There is a right to earn money through exchange of your labor, save a sufficient amount to freely and voluntarily contract with someone in exchange for either rent or purchase of their property.

ANYTHING ELSE IS PURE THEFT !

Van Jones

August 30th, 2010
8:54 am

“…help borrowers whose mortgages exceed the market value of their homes.” Help? What does that mean? I think I feel someone elses hand in my pocket.
And I have a question for Dave Swanson. If a homeowners principle is reduced to the current market value and the market rises, does the govt un-reduce the principle? Or does Joe Homeowner get to enjoy a nice windfall courtesy of Mr. and Mrs. Taxpayer?
It seems simple… mortgaging your future to buy something (even a house) is a risk and that risk can go both ways.

Brad Steel

August 30th, 2010
8:54 am

Silly question and silly programs.

You can’t pay a mortgage payment without a paycheck from a job.

Steve3663

August 30th, 2010
9:01 am

Some of the problem is people that have over extended themselves. But some of you are pretty arrogant. The job market is the problem. If you have a job right now that’s paying your bills you should count yourself lucky and not look down on those that don’t. I’m a carpenter. I’m currently out of work and I look for a job every day. There just isn’t anything. I haven’t over extended myself. My mortgage is $123,000. I had no problem paying my bills when I was working. When I was employed full time my credit score was close to 800. I’m not ‘irresponsible’ and I’m definitely not a ‘victim’. I’m out of work.

Alecia

August 30th, 2010
9:02 am

“Housing is a human right.”???The last time I checked housing was something you earned. This man is in the wrong country. He needs to go to Cuba. Here’s an idea…Let’s take a look at the mortgages that have been paid on time for the past yr-18 mos and refinance them no questions asked at the current rates. If we are going to bail anyone out, let’s focus on taxpayers that pay their bills. Atleast they pay into the system. I agree that this victim/bailout mentality needs to end. I have 2 tenants that did not pay their rent this month, because they wanted to buy school clothes and take trips instead. For some reason, I am supposed to be understanding and just let them have a pass. After all…Junior needs a new I phone. Another thing…let’s cut down on these entitlement programs. When I have to show up with a purse full of coupons to buy brand X on sale, only to get behind some welfare mamma with a cart full of steak or some hippie at the farmer’s market with over $100 in organic gourmet cheese, we have gone too far.
Unemployment for 99+ weeks needs to stop. There are too many long term unemployed that are just abusing the system, especially contractors. Why work for $600 a week ($400 take home) when you can sit on the couch for $300/wk and work a few tax free side jobs or sell junk at the flea market or Ebay?

Hank

August 30th, 2010
9:07 am

Instead of helping the people who have already proven to be financially reckless, why not throw a bone to the folks who have saved money and are just waiting for the right time to buy a home. My wife and I didn’t buy during the mortgage madness even though all our friends and neighbors were. We couldn’t justify the cost. Now, they’re screwed and we have 50K waiting to put down on a house. C’mon Obama. Give ME a reason to buy. I’m ready.

Reality Check

August 30th, 2010
9:09 am

It’s funny, I refinanced my house with Suntrust back in June after my wife and I got divorced. Even with a credit score well into the mid 800’s, a perfect payment record for over a decade, No credit card debt,3 houses bought and sold, AND $15,000 to pay down the balance on the 2nd mortgage that was taken out at the time of purchase, I still had to jump through just about every hoop they could throw. I couldn’t help thinking that had the lenders actually follwed these steps 5 years ago, we wouldn’t be in nearly as bad a shape. Unfortunately, when your speeding through the tunnel, and all you see are giant dollar signs, it becomes to easy to to look around and see how your actions affect others.

N

August 30th, 2010
9:13 am

I think they are jumping way too soon…need to give the market 6 months at least after the tax credit expiration to see if its the market or the fact that sales got pushed forward because of the credit. Sounds like they are over-reacting big time.

N

August 30th, 2010
9:15 am

And with how long it takes to close the numbers we got were really the PENDING SALES FOR MAY, THE MONTH AFTER THE CREDIT ENDED. Lets see the data in a few months.

Peggy

August 30th, 2010
9:16 am

Of course the government cannot fix this problem. They created it. The rest of us don’t have enough money to pay off all the silly spending that the Obamacrats are creating. The democrats are creating a negative business climate with higer taxes, vastly more regulation and an adversarial relationship with small business owners. No wonder there are no jobs.
If we stay on this path, there won’t be any. Biden’s promises of recovery summer remind me of a drunk begging for money but promising not to spend it on more cheap wine. He’s lying and we know he is lying. The question is, are you going to enable him with more time and more money?
Obama’s arrogant, out of touch government spending-centric solutions have failed.

Bone

August 30th, 2010
9:20 am

Haywood, You must be the one that was holding the sign! :-)

Really?

August 30th, 2010
9:22 am

dave swanson – So let’s say the market didn’t tank and everybody ended up will some good equity in their property would it had been ok for the bank to ask for the equity back. Buying real estate is an investment and sometimes an investment goes the wrong way.

Mr. big

August 30th, 2010
9:22 am

The more assistance these people receieve, the more damage will be done to the people paying the mortgages on time. What people don’t understand is many people are currently un side down on the homes and they are making their mortgage payments. This is a good thing. However, if additional benefits are provided to irresponsible people that have not been paying the payments, we are creating a system that rewards the deliquent members of society. We need to forget those folks and not forget the americans that are working hard to keep paying the depts and not looking for hand outs! However, Obama has never really wanted to look out for responsible people.

Marv

August 30th, 2010
9:22 am

WHy don’t they offer the programs to everyone? Not just the people who didn’t think before they got the interest only or ARM’s. I have a 1st and a 2nd HELOC because my wife got laid off and I scrimped & went without so I could make my mortgage payment but I can’t use the programs because I have a 2nd HELOC and my house won’t appraise for what I owe. Just another pathetic way the Obama admin. Is only helping the lazy who won’t work.

Bwana

August 30th, 2010
9:26 am

housing is NOT a right. healthcare is NOT a right.
We HAVE the right to NOT subsidize other peoples’ expenses.

Buzz G

August 30th, 2010
9:27 am

Stop the spending now!
We taxpayers are $13.3 trillion in debt now.
But that only includes the spending we actually account for. Then there is all the “off the books” spending.
We taxpayers are on the hook for another $6 trillion in debt from government entities Fannie Mae and Freddie Mac. These guys payrolls are packed with Democratic party political appointees.
And then there is the Pension Benefit Guarantee Board, putting us on the hook for unknown trillions of dollars more.
And then there is Sallie Mae. No one seems to know how much debt she has hooked us up with.
And then there is the unfunded liabilities of Social Security and Medicare estimated to be another $100 trillion.

When does the spending stop? When we get Obama and Pelosi and Reed out of office. They think the way to power is to spend this country into debt. And they are doing one hell of a job of it. The AJC and the rest of the press rarely mention this debt, but it will eventually drag our country into third world status. Maybe that is what Obama wanted in the first place.

unbelievable

August 30th, 2010
9:34 am

What about the homeowners who bought what their wallets could afford not what their hearts desired? What about the homeowner who has lost their job but still manage/ struggle (several parttime jobs) to make their house payments? I guess the new philosophy is if you screw up you get rewarded. Why not put the money into the infrastructure instead of supporting people’s bad decisions? If the past bailout money had been put to building infrastucture such as schools and roads, not funding pet projects, the construction industry would be thriving now. Look around at the schools that need repairing/ replacing, the roads & bridges, this is what would jumpstart the economy, not bailing out someone who cannot pay their bills.

Bob

August 30th, 2010
9:35 am

Heywood, Got a clue ?

SunnyinForsyth

August 30th, 2010
9:56 am

Short answer: No, the federal government is insanely stupid – the problem is not the mortgage/housing – it’s the lack of earned income by the homeowners who are in the houses. On the federal level, job creation MUST be top priority. I’m employed – but an India-based outsource company is taking over as many jobs in my company as my management will let them and it’s been going on for years. I expect my position to be outsourced inside 2 years. The US Federal government has got to stop creating financial INCENTIVES (tax breaks and/or savings, etc.) for outsourcing USA jobs. It’s a no-brainer for management to ‘outsource a position’ to a country who does not have the same federal expense or standard of living that the USA does. It just does not matter if I’m excellent at my job or not. The fundamental issue with outsourcing USA jobs is: To raise up second and third world countries, the US standard of living MUST FALL if the ’size of the pie’ is not growing! Now that the ’size of the pie’ is actually shrinking – the USA is hurting in a massive way!

When outsourcing began 20-30 years ago, investors were pleased with the ‘cost savings’ and they thought that the displaced workers would ‘find something else’ or just didn’t care what the macro-economic impact would be. Well, the outsourcing problem has hit ‘critical mass’ and there are very few jobs for displaced workers to move to. Good people need good jobs – not low-paying part-time jobs. And basing the economic growth plan on getting people ‘to spend more’ to buy stuff made in other countries is just sending MY TAX DOLLARS to support another country – not USA!

Federal government creates policies that take my hard-earned money (taxes) to give to others who are in need so they can buy stuff made elsewhere and then provides corporate tax breaks/incentives to outsource my job – and then wonder why I and my fellow citizens are unhappy! I’m MAD about it and just not going to take it any more! That SHOULD be the USA citizens’ mantra come November 2010 (and 2012 for that matter)!

Refudiator

August 30th, 2010
10:03 am

Steve 3663 is right on.Replace carpenter with electrician and that’s my story.I’m boxing up and moving right now.I hate this.

Oh Well

August 30th, 2010
10:34 am

Sunnyin Forsyth…
I AGREE!

Not everyone bought more than they could afford. If you’re working now – be thankful…not judgmental. Believe me, constantly worrying about making the mortgage note is not my idea of a picnic – I’m sure it’s not anyone’s.

I also agree with the folks that said that there should be a streamline refi/similar program to allow for people that are current on their mortgage to bring their rates down.

Of course, I’m a little more radical. How about forcing the banks to “eat” some of the over-inflated principal?!?! They gambled and bet on the wrong side. We are so quick to blame “irresponsible homeowners” – how about the so-called “experts” that some of these banks are trying to defend and keep with huge bonuses!?

Bailout!

August 30th, 2010
10:52 am

More giveaways of tax money from producers, who pay their mortgage, to deadbeats who don’t. Just print more money, borrow from the chinese and take what is needed from the workers who pay taxes!!!!

R

August 30th, 2010
11:17 am

NO! The government was controlling the banks during the RE boom creating this fiasco and now the government just wants to help those that STILL have no business owning a home. What I want to happen is those that are walking away now have to pay for what they are doing to our economy and the taxpayers. The excuses are now inexcusable. especially for the majority of us that have done and continue to do the right things. I am a homeowner and I have lost 2 jobs in the past three years and I am currently unemployed. I have enough saved up for 18 mos to live on, and I did alot of that savings on my job that that I recently lost! Help ME, refinance my home to a lower rate! Either help those that are in good standing, or face facts that people are going to start walking away and taking advantage of the entitlement mentality that has taken over our country!

The Economy

August 30th, 2010
11:54 am

How about taking away the pension a politician would receive and us it for TARP ??

Sounds good to me, anyone else like this idea??

Buzz G

August 30th, 2010
1:01 pm

To Steve3663 and to Refudiator,

If we could just get our politicians to enforce our borders and send home the illegal aliens you would both have jobs and would both be paying your mortgages. Within one mile of my house there is a company which installs cabinets and anther that does new construction plumbing. Both are loaded up with illegal aliens making substandard wages. If we get Obama and the Dems out of office, maybe we will finally do something about this problem. These jobs belong to Americans!

ziza

August 30th, 2010
3:15 pm

to dave swanson, yllk and oh well. DITTO – well said!!!

danny

August 30th, 2010
5:41 pm

YES LETS

GIVE SOME MORE TO BIG CORPRATIONS

[...] in the housing and mortgage industries, home foreclosures are up significantly this year, …Will new housing programs cut foreclosures?Atlanta Journal Constitution (blog)Obama Plans Refinancing Aid, Loans for Jobless Homeowners, HUD [...]

Venus louviere

September 5th, 2010
2:02 pm

TO “N” TOO SOON? TOO LATE- not for me…but for a lot of others. Go Blow it!!!