Policymakers will likely keep mortgage rates low for the next several years because it's the best and cheapest way to heal the housing market, a senior Obama administration official hinted on Wednesday.
In a nearly hour-long, wide-ranging interview with a small group of reporters from various publications, the senior official, who spoke frankly on the condition of anonymity:
* Defended the administration's lackluster foreclosure-prevention initiatives, arguing that a million struggling homeowners benefited from a temporary period of lower monthly payments even though they may ultimately lose their homes;
* Acknowledged that one success for the administration has been its role in lengthening the foreclosure process, despite the risks it poses to the stability of the housing market;
* Said that home prices will likely decline in the near future; dismissed concerns that low interest rates may lead to another asset bubble as investors chase ever-higher returns, and instead encouraged such risk-taking because it will benefit the economy;
# Said that most of the unemployed are jobless because of the boom-bust nature of the business cycle, but that the jobless rate could remain high for the foreseeable future if the unemployed lose critical skills due to long spells of joblessness;
Wow. Wow. I mean wow.
The Obama administration DOESN'T care that the mortgage relief program ISN'T helping homeowners, all they want to do is stretch out the rate of foreclosures to keep housing prices from falling even more when a bunch of foreclosed properties hit the market all at once.
Is that the change we can believe these people sold on the campaign trail?
Vote for Obama, he'll extend the foreclosures out while sticking hundreds of thousands of troubled mortgage holders with a few more months of extra payments before they ultimately lose their homes!
Gee, I don't remember hearing that on the campaign trail?
But that's exactly the plan.
And the worst part is, IT'S NOT ACTUALLY WORKING.Here is another participant at that briefing, Mike Konczal on that:
- They are sticking by HAMP. The narrative seemed to change from helping homeowners to spacing out the foreclosures. I asked them to repeat it, because the idea that billions of taxpayer dollars are being spent to smooth out foreclosures for banks struck me as new narrative – it’s explicitly extend-and-pretend, and also fairly cynical.
- There was talk about how fiscal policy can’t move through Congress. I asked them about only 0.5% of HAMP being spent and how that could be used without Congress’ permission. Before I suggested that the remainder of the $50bn be divided into two funds, the Digging Holes Across States (DHAS) fund and the Filling Holes Across States (FHAS) fund, two far more socially productive means of spending the HAMP money than what is currently being done with it, I was told that the entire $50bn is expected to be spent by the time the program is over. I didn’t believe it; we will see.
- Overall, there seemed to be a sense of “we are done here” from the meeting. Maybe it was the fact that it is August, the informal manner of the meeting and a news cycle is driven by insane things, but there was a sense with the financial reform bill passed, deadlock in Congress and a Federal Reserve tip-toeing around its mandate things were going to slow down and options are more or less removed from the table. Which is a very scary thought with the economy the way it is.
They REALLY, REALLY have NO FUCKING CLUE how to deal with either economy or the housing problem.
Really fucking unbelievable. As I think I said to Mike at Netroots Nation, if HAMP is actually a program designed to boost the housing market and funnel money several billion more dollars to banks, it's also a really fucking horrible and stupid and inefficient way to do that even without the "screwing people over" part.
These are very stupid, very arrogant, very stubborn morons in the administration and the head guy seems to be the most stupid, most arrogant and most stubborn.