Housing Recovery In Peril As Obama Aid Program Has Little Effect

Bloomberg News:

June 29 (Bloomberg) -- Driving through Riverside, California, Bruce Norris pointed to a half-dozen empty houses with "For Sale" signs stuck in untended lawns that he said investors might buy if banks would just extend some credit.

Read the whole story: Bloomberg News

Comments

[FrozenNorthObserver]

If you are one O's big ban kster donors it is having a great effect, they are all still living high of the hog. O no more cares about the "little guy" than Jr did. Pretty speeches for the peasants and truck loads of cash for big biz.

[denicci1977]

I got a notice from a company in New York saying they can give me a much lower fixed rate for my mortgage. I told them to send me the information so I can look it over. Well they sent me their company's info, their BBB A+ stats, and the last page is for me to attach my check to pay $1700.00 as their fee. LMAO, come on now sneaky snakes scammers, all people who live down south are not as stupid as you think ! If you have to pay money to get money, then people run as far away as you can !

[INTUITE]

Sorry people, no one can solve the economic problem. It has been thirty plus years in the making. An economy that exists on consumption while for decades we have been making less and less as we export more and more of our American Signature labels overs seas to be manufactured. Corporations chase cheap labor markets, and see more growth for themselves in developing nations than here at home.

Worse, there are too many of us to keep meaningfully and gainfully employed, here and abroad.

Those that do consume, do so with credit, pushing their ability to pay over the edge.

Real hard times lay ahead; no President no party can solve it --- it's too damn late.

[kwoodberryesq]

I believe Obama is out of touch on the housing issue! Look at the HUD standards, they are impossible for middle class Americans. Your debt to income ratio for some can only be 31 and 43 for others... With all the economic problems now, who do you know that has their life up an running that has a debt to income ratio of less than 55%. These criteria don't look at the person, only the numbers, now I know what most will say is looking at something other than the numbers got us into this mess in the first place. But, if you look at how a person manages their finances, versus how much debt they have vs their income I think you can get a better picture. As long as the debtor is not going over 85 to 90, if he manages well based on his credit history, job history, and savings history, then lend...

The structure now will continue to lock buyers out of the market, and I need to sell a house so loosen up.

[VikingQuest]

LOL, a career politician out of touch?

Never :)

[oktober]

A president can not know everything about everything. Its why he has a team. No one expected Bush to understand the housing market, no one can expect Obama either. What we should expect is that he keep people around him which he can feel comfortable with making decisions, which I do not think he has done.

Politicians work in teams, very rarely do they do anything solo. Obama is a good talker, its how he got elected. The only problem I have now, as with may prior presidents, he talked the talk now he needs to walk the walk.

Firing newly appointed team members would be a good step when in 6 months all their efforts related to the housing environment in this country doesn't shape up like they'd planned.

Politicians shouldn't receive a paycheck. But that's a whole other rant.

[VikingQuest]

Shocking . . . a massive Government program isn't working as planned . . .

Since we didn't learn from the Bush Stimulus, Medicare, Obama Stimulus or TARP . . . I guess we deserve this for being blind followers.

[PHinGA]

I guess a lot of you have forgotten that there was a lot of resistance for a comprehensive housing recovery plan, not just from lawmakers, but mostly from the public. Some homeowners (current on their mortgage) and renters were afraid that it would reward homeowners who bought more house than they could afford. Pres. Obama, to appease them, watered down this plan. Now that it's not effective, everyone is complaining.

[Viper]

And most of the stimuli effect will not start hitting until late 2009.

Also we watered down the stimuli effect by giving tax cuts... which as predicted people are not spending , but saving and if they do spend it, its on stuff made in other countries since we dont make much any more and thus almost all the stimuli flows to the country where the goods are made! Duh...

Tax cutd worked well as a stimuli once, but that was before massive trade deficits... They nolonger are very effective... if they were, we would not have under Bush created no net private sector jobs and fallen into the worst economic crisis in 80 years.

Regards

[VikingQuest]

So in other words it is a bad idea for people to save money?

[PINO]

AnnfromCA wrote:
Well, no kidding. The bill was always a pretend help. Sounded great on TV, but nobody can get any of the loan modifications.

It is a sham. I just hope healthcare doesn't turn out similarly.
__________­__________­__________­__________­__________

Believe it or not, government-run healthcare is NOT the answer, and it WILL turn into a fiasco that the American people will pay for many generations.

The way I see it is, the problem with America is stupidity. I’m not saying there should be capital punishment for stupidity, but why don’t we just take the safety labels off of everything and let the problem solve itself?

[Viper]

Lets see the VA and medicare are government run, The rest of the world has government run healthcare.. insure everyone and have better outcomes...

Regards

[VikingQuest]

"Lets see the VA and medicare are government run"

Yes they are :)

"The number that we need to be focusing on is the total federal financial hole; that's the total liabilities and unfunded promises for Social Security and Medicare. As of the end of 2007, which is the latest set of financials that we have right now, it was $53 trillion. That's $455,000 per household."

http://www.pbs.org/wgbh/pages/frontline/tentrillion/interviews/walker.html

[jaschrod]

Personally, I think the problem has reached such a massive size that it cannot be fixed. We are over populated, and part of our society is still having babies like there is no tomorrow. We have reached a point where there are no answers. Our government thinks creating more debt is the answer. That is not the answer, that is what put us into this situation in the first place. We are in for a major, painful downfall. Medical, food, and many of the normal necessities of life will disappear for many of the people. In this country, we do not have the manufacturing base that we once had, and we cannot sustain our country on service jobs alone. There will be nothing to service, and if there was, hyper inflation, which is coming, would put most things out of reach for most of us.

[inorbit]

Er, the birth rate is way down in the US for all races except Hispanic - and that isn't all that high. Just who are you referring to when you say "part of our society is still having babies like there is no tomorrow?"

[PINO]

WAIT. I thought obama was going to save everyone's mortgage. Isn't that what the pork-a-stimulus bill was all about. To save someone from not going into foreclosure?

Here in lies the problem. It is the preponderance of half lies and half truths mixed together to confuse Americans. obama's administration could care less if you end up foreclosing on your house. But they still got there monies for all their pet projects that will help stimulate the economy, right?

They made sure that we believed that unemployment would not exceed 8%. Where is it at now, 9.4% and predictions are that it will hot 10% by end of summer.

Wow. I am so glad that we have a president like obama? NOT!

[Viper]

During the past 8 years no net private sector jobs were created. That has never happned before. Tax cuts that pre 1980 that worked now went to buy goods made in other countries and build them new plants and create jobs there, not here. Thus no/little economic stimuli.


On top of that fully 8 percent of our economy came from hpome refinancing which is now gone long term. Those jobs will not come back. We outsourced 5 million mfg jobs under Bush... those are the most important jobs in an economy in that each MFG job creates 5 other jobs.

Reagan trippled the national debt and started the deindustrialization of America.... Bush doubled the National debt and by the way this years 1.7 trillion defict is still running on his last budget.. since the Fed Budget year begins in October...

Until we start making stuff, this is our economy. 3rd world exports such as raw goods and agriculture.

Think of our economy as a bucket of water. Trade deficts and debt payments that go to foreign countries are holes in the bucket.... our bucket is losing water and has been since Reagan...

As that water leaked out we put more water by borrowing from other atan additional arrying cost... but as we all know you have to p[ay back what you borrow.

.

Regards

[Viper]

You also cant spend 52% of the worlds defense budget when you are now just 22% of the worlds GDP. And defense spending is another hole in our bucket since much of that spending leaks out of the bucket ( 750 foreign bases) and the dollars dont create income producing capital goods...

Since 1980 MFG dropped from 32% of GDP to 8% ( and half of that is whats left of our auto industry) while healthcare rise from 8% to 18%... a prescription for failure!

Germany is the leading exporter in the world and its all MFG high labor added value. Much of our exports are 3rd world country exports... raw materials and agriculture... not much value added, low paying jobs. Their population is 82 Million. Ours is 330 Million. There workforce is completely unionized and they have a single payer system.

Detroit has lost half of its population. Avg Price of a house is just 18K. Canada is also unionized. Where did the jobs go... across the lake to Canada. Their housing prices are way up to 200K. More cars made in Ontario than Michigan. The MFG move there and the people follow because there is no healthcare cost in the product they produce.

Regards

[Cheesemelt]

A data point from someone who just did a refi from a 6.5% 30-year fixed to a 4.825% 30-year fixed.

You can check your eligibility for this program here:
http://makinghomeaffordable.gov/

The cost to make this switch is not trivial, BUT, the banks will attempt to bleed you further with points on the closing. Take them to the 11th hour and then balk at the closing points. If you don't blink they will almost always crater because there's too much money to be lost when they sell the mortgage to the Freddie or Fanny.

Our out of pocket was supposed to be over $6K but I fought with them and reduced that to just over $600 clams.

Good luck.

[AnnfromCA]

Well, no kidding. The bill was always a pretend help. Sounded great on TV, but nobody can get any of the loan modifications.

It is a sham. I just hope healthcare doesn't turn out similarly.

[elfNW]

It`s a complicated article because it`s a complicated problem. If the question is have housing prices yet hit bottom, or when will prices recover to pre-recession levels the answers are not yet, and probably not for decades. That`s why it has been called a housing bubble, prices were far out of kilter with real value.

When will the sort of easy credit for everyone that fueled the bubble become available again? One hopes never. The reason there are so many foreclosures is too many homes were purchased, too many loans were extended, to people who could only afford the payments predicated on ever increasing income and ever increasing in housing prices (instant equity). With a recession affecting joblessness and income, and the burst of the home price bubble the market is flooded with home lost by people who could never really afford them.

I`m 55 years old and currently unemployed, and have been for almost a year. I don`t know when I will find another job, and when I do it will almost certainly not be at anywhere near my old pay. The up side is that I have years saved and invested at least 10% of my income. When I purchased my home years ago it was within my means and it is almost paid off. I`ve never taken home equity loans. So I my make it until I can take S.S.

[Bumpkins]

Good points elf........Question to all.... read this somewhere.....the house value can only go down to the price it will cost to build it from the foundation up......it costs 100 a square foot here to build....if your home is 2000 sq. ft. the lowest value would be200 thousand...unless the the price of building a new home goes down??????­??????????­??????????­?

[jdw1981]

Oh, stop it now! Obama has great pecs.

Isn't that enough for you?

[uvymopka]

Seems the Republicans were right ! His plan was pork.

[fleaba]

IT's great that the echo boomers are profiting off of all of this, however, for those of us in our 50s who have lost jobs and are losing homes this is a sham. Those lucky 20 and 20 somethings will be paying for the support of all those who want to work, but can't due to lack of jobs and ageism. I'm talking about welfare and housing and all those medical issues. If society doesn't address those who have been shunted aside in one way, they will deal with it in another way.