'Obama calls Congress dysfunctional'
That wasn’t the only attention grabbing headline of the day.
Not that it isn’t. But it’s just so…disconnected. Which is his tactical goal, apparently. Disconnect himself from ‘them.’ Here’s USA Today:
“Where they won’t act, I will,” Obama told a group of homeowners in Las Vegas, Nevada, a state with the nation’s highest unemployment rate — 13.4% — and one of its highest rates of home foreclosures.
“People out here don’t have a lot of time or a lot of patience for some of that nonsense that’s been going on in Washington,” Obama said.
Really? What to say…
Some columnists have plenty to say, speaking of pathetic. I did a double-take on this Reuters headline to be sure it wasn’t a spoof.
HARP II is being announced with great fanfare today:
Across the country, nearly 11 million owe more than their property is worth.
Millions of these people have done everything right. They’ve paid all their bills and kept current on their home loans. But right now, they’re stuck with higher payments because their mortgages are underwater. They’re not eligible to refinance because the decline in home prices have made their property worth less than what they owe. And that’s a problem President Obama knows must be addressed…
Today, President Obama is taking action.
Sounds impressive, eh? It is, until you read the official FHFA press release. At which point you learn that
-If you’re a homeowner whose mortgage isn’t owned or guaranteed by Frannie, you’re out of luck.-
-If your mortgage was sold to Frannie after May 31, 2009, you’re out of luck.
-If you want to get out of negative-equity hell by doing a principal reduction, you’re out of luck.
-If your bank doesn’t feel like participating, for whatever reason, you’re out of luck.
All of which is likely to result in not-very-much, as the FHFA itself concedes:
For many reasons it is very difficult to project the number of mortgages that may be refinanced under the enhancements to HARP…
First, by the end of 2013? Never mind mortgage relief now, we’ll try and get you mortgage relief in two years’ time?Secondly, the current pace of HARP refinancings is pathetic….
And the article counts the ways.
In other words, the FHFA is projecting that the pace of HARP refinancings won’t increase at all as a result of this plan. We’ll still average out at about 30,000 per month — maybe a bit more, maybe a bit less, but you’re never going to make a dent in the mountain of 11 million underwater mortgages at that rate.
This whole exercise is so obviously pathetic that even above-the-fray central bankers are sneering at its inadequacy.
And nothing, it concludes, will get done before the election of 2012.
Which, as Dudley says, bodes very ill for the economy as a whole.
So the president goes on the road and poses as an outsider.
“Congress passed his stimulus bill, his health spending bill, his Dodd/Frank (financial regulation) bill, his state funding bill and his housing plans,” said Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, R-Ky.
“And now,” Stewart added, “the housing market’s down, unemployment is up and the President is now acknowledging that all that didn’t work by constantly pointing out how bad the economy is.”
Perception has worked for him before.
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