This is in reference specifically to the programs as of late that have tried to keep people in their homes through loan modification. This is a question I and many others have been asking and trying to figure out for some time now.
While I attempt to be eternally optimistic, numbers usually don’t lie (if they are presented honestly – ha ha). Seriously though, I am an avid reader of anything Mish writes and he nailed it on the head here –
Statistical Nonsense On “Help”
For the 40% that end up defaulting anyway, how much money, time and mental energy did they waste in these programs? Assuming the other 60% keep their houses I have to ask “Who was it that was really helped? The bank or the home owner?”
I suggest in most instances if anyone was “helped” it was the lender. It is no favor to make someone a debt slave forever in these programs. Finally, one must look at other costs.
For example, how many people stopped paying their mortgages just to get “help”? Also note that the sooner housing prices bottom, the better off everyone will be. These programs harm price disclosure, help to keep prices elevated, and thus curtail genuine demand.
From these perspectives, HAMP and the entire gamut of “help” programs has done anything but help. Speaking of government help programs, please consider the Mission Statement of Fannie Mae.
We are a shareholder-owned company with a public mission. We exist to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market.
A quick check now shows the link I had with that mission statement has been redirected to About Fannie Mae
The link now states “Fannie Mae is a government-sponsored enterprise (GSE) chartered by Congress with a mission to provide liquidity, stability and affordability to the U.S. housing and mortgage markets.”
Fannie Mae clearly failed its mission to provide stability and affordability to housing. The truth is no government program ever provides stability or affordability. HAMP won’t either, and the truth should be easy to see.
You can find the full article here
Keith Klassen – Real Estate Broker