Housing prices have dropped to their lowest level in almost a decade. And while the rate of homes falling into foreclosure has slowed, the reason is delays in the paperwork, not a housing recovery, says RealtyTrac. There were 219,258 foreclosure filings in April, the latest month available.
The housing crash continues to affect the rest of the economy. But, as we recently heard from former White House economic adviser Jared Bernstein, the administration was too worried someone might get help who didn't actually deserve it -- this, despite widespread fraud that makes it almost impossible to assess blame.
To quote Atrios, "Maybe someone should do something?"
The Obama administration’s main program to keep distressed homeowners from falling into foreclosure has been aimed at those who took out subprime loans or other risky mortgages during the heady days of the housing boom. But these days, the primary cause of foreclosures is unemployment.
As a result, there is a mismatch between the homeowner program’s design and the country’s economic realities — and a new round of finger-pointing about how best to fix it.
The administration’s housing effort does include programs to help unemployed homeowners, but they have been plagued by delays, dubious benefits and abysmal participation. For example, a Treasury Department effort started in early 2010 allows the jobless to postpone mortgage payments for three months, but the average length of unemployment is now nine months. As of March 31, there were only 7,397 participants.
“So far, I think the public record will show that programs to help unemployed homeowners have not been very successful,” said Jeffrey C. Fuhrer, an executive vice president of the Federal Reserve Bank of Boston.
Data released last week suggests that the administration’s task is only growing more difficult as the problems created by unemployment and housing persist. New job growth in May was anemic, and unemployment inched up to 9.1 percent, the Labor Department reported Friday.