Taking a closer look at the realities of all the government foreclosure prevention programs sheds light on how off the mark they have been.
For the record, at the time ALL of these programs were celebrated as a possible solution to the housing crash. Sure, in hindsight its all too easy to be cynical about the Obama Administrations various programs, acts, guidelines...not to mention the literally dozens of new acronyms we have all had to learn. (HAMP, HAFA, PRA, HARP etc etc)
Here are the hard facts from the NYT and Corelogic:
Congress set aside $50 billion for foreclosure prevention, amid administration projections that three million to four million homeowners would benefit from modifications. So far, the Treasury Department, which oversees the program, has spent slightly more than $1 billion, and just 607,000 homeowners have received permanent loan modifications (of those, 11 percent have defaulted).
So, projections were for 3-4,000,000 owners to benefit from modifications (HAMP) and only...607,000 actually have. Subtract from that the 60,000 that defaulted on their trail loan mods. Is being that far off from projections really a failure.....or (as my dearly departed Father, Noland Harris was fond of saying) "its close enough for government work?"
Late last week, CoreLogic came out with more refined data on the "shadow housing inventory". Shadow inventory homes homes that are seriously delinquent (90 days or more), in foreclosure, or real estate owned (REO) by lenders. The total number declined from 2 million to 1.8 million in January. Reason to celebrate...not so fast...
Banks are struggling to keep up with the problem even though many are trying to renegotiate mortgages. Foreclosures have gone down recently not because there are fewer homes that are headed for foreclosure. But because lenders and servicers were overwhelmed by the sheer volume of work involved, and are just catching up. Add to this the whole robo-signer mess that more or less put foreclosures on hold for much of late 2010.
Facts:
* Of the 1.8-million unit current shadow inventory supply, 870,000 units are seriously delinquent (4.2 months' supply).
* 445,000 are in some stage of foreclosure (2.1 months' supply).
* 470,000 are already in REO (2.2 months' supply). [
* Lender Processing Services, says the total US loan delinquency rate stands at 8.8%, while the foreclosure inventory rate sits at 4.15%.
As the data show, these programs have done nothing to aid the housing market, and have failed to help homeowners.
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