No “Hope for Homeowners” so far
Bailout News, Politics, California Housing Crash, Florida Housing Crash, The Economy, Real Estate November 4th, 2008
More signs that all these bailout plans our government is implementing are not working. The San Francisco Chronicle reports the following:
The $300 billion “Hope for Homeowners” program was begun Oct. 1. Designed by lawmakers eager to respond to the mortgage crisis, the Congressional Budget Office had projected it would let 400,000 troubled homeowners swap risky loans for conventional 30-year fixed rate loans with lower rates.
But the early results are discouraging: The government received only 42 applications in the program’s first two weeks, according to the Federal Housing Administration. Since the applications take about 60 days to process, no loans have been approved.
Steve O’Halloran, spokesman for the Department of Housing and Urban Development, called the projection of nearly 20,000 borrowers “an extremely preliminary estimate of early applications for a program that is barely a month old. Borrowers and lenders are continuing to sign up.”
Since the program requires lenders to reduce the value of a loan and take a loss, it’s unclear how many lenders will participate. In addition, the program may be unattractive to some borrowers because those who sell their properties must agree to share some of their profit with the government.
