If you tuned in the President’s State of the Union Address Tuesday night, you heard him mention the housing crisis. How could he not? It remains a top concern in voters’ minds—right after jobs.
One newsworthy item was the President’s intention to expand the Home Affordable Refinance Program (HARP) to include non-GSE loans. That would make refinancing a potential option for millions more underwater homeowners. How many will take advantage of it? We’ll see. Meanwhile, it still doesn’t address the equity loss at the root of paralysis in the housing market. Ho-hum.
He touted his newly-appointed head of the Consumer Financial Protection Bureau (CFPB): "Today, American consumers finally have a watchdog in Richard Cordray with one job: To look out for them.” How will he do that? By preventing lenders from using “confusing forms and deceptive practices." (For this we needed a new multi-billion dollar agency?)
The other housing-related items continued the theme of punishing the fat cats, who overwhelmingly inhabit the financial services sector:
We’ll also establish a Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud and protect people’s investments.
And tonight, I’m asking my Attorney General to create a special unit of federal prosecutors and leading state attorney general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. (Applause.) This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.
—All red meat for the President’s Democratic base, which is baying for the blood of big bankers. But will it move the housing sector forward in any meaningful way?
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