At a speech in Falls Church VA this week the President said that "hundreds of thousands of people have lost their home to foreclosure." Is not the number more like 2.3 million? Does he not fully understand the gravity of the situation? Even if he meant 999,999 he is still off by 66%.
Where have all the advocates from Congress and academia of a strong national modification effort gone? Why has the media stopped making the foreclosure crisis a major story anymore? Have things gotten better?
You can say yes if you think that having only slightly over 300,000 properties a month receiving some type of foreclosure notice better than the 330,000 per month a year ago. The monthly number has now been down three months in a row which is always good news, but let's remember those are new people into the system. We still have the millions that are already trying to navigate the process with very mixed success. It makes me laugh when I hear the term used in the HAMP debate "dropped out of the program" like these homeowners said, "Forget it. I do not want to save my home."
I wonder if anyone has the number of people that have been paying their trial mod for six, seven, or 10 months only to be told they do not qualify. Are they considered as "dropping out of the program?"
Let’s look back to the winter and spring of 2008 and 2009. We had hearing after hearing on how best to slow the foreclosure crisis. We had the House Financial Services Committee Chairman Barney Frank, Senate Banking Committee Chairman Chris Dodd, and many of our elected officials’ screaming – and rightfully so.
When the Obama Administration took office, they acted quickly with Making Homes Affordable (MHA) and the Home Affordable Modification Program. This political pressure continued but not at the pace of those earlier days nor was it covered by the mainstream media as a crisis anymore. If you ask the 7 million Americans still in trouble if this is a crisis, I think you will hear a few choice words about the handling of the process. If you ask the millions of Americans involved in the housing industry on all levels if this is a crisis I am pretty confident they still think it is.
So I ask why preventing foreclosures is not the lead issue on the campaign trail during this election cycle?
A large number of the unemployed can be directly associated with the real estate downturn, which has been exaggerated by the loss of jobs, which in turn cause foreclosures. This issue clearly affects every candidates' constituency, most Congressional and Senate office have people assigned to handle the thousands of calls they get from people losing their homes. I can not imagine the Administration or the Democrats that control both Houses just don’t care. I don’t think the Republicans want to inherit a real estate market that continues to decline which will further slow any meaningful recovery in real estate values which in turn will spur the economy. Republicans cannot honestly think tax cuts will create jobs when millions of troubled homeowners are losing their homes and therefore can't be considered consumers.
I can only speculate that the Democrats do not want to highlight at this time what some call a government bailout (HAMP). I hope they can defend that the overall objective of a national modification program is intended to protect the property values of all those Americans still able to pay their mortgage on time. I base my assumption on the fact the GAO released their report in June on TARP which highlights deficiencies’ in Treasury’s implementation of HAMP but yet as of early this week there have been no hearings scheduled at the appropriate committees in both Houses on the GAO findings. Now we have the Congressional Oversight Panel report which again highlights problems at Treasury with HAMP. Does anyone think that maybe Congress should show an interest in the finding of both reports to try and get the program working properly as designed? We hate to rush things but since the release of the GAO report an additional 600,000 people are falling into trouble.