Nothing seems to surprise me anymore when it comes to our Federal Government’s attempts to spend our way out of the housing and economic crisis. The latest round of failed attempts is a doozie.
The HOPE for Homeowners Plan, which has now been in effect for just over five months, was estimated to benefit 400,000 families across America through the modification of their existing home mortgages. $300 billion for the “Plan” was approved by Congress and had as its chief architect Senator Chris Dodd (D-Conn) – yes, the same Chris Dodd that approved the big bonuses to AIG executives.
Well, what success has the “Plan” had? To date only 752 applications have been received nationally, and, are you ready for this? Only ONE homeowner has been helped and been able to avoid foreclosure by the Plan! Why has the Plan been such a horrendous failure, resulting in a huge waste of taxpayers dollars?
Why the Plan Failed
Primarily, lenders failed to “voluntarily refinance delinquent mortgages” as the Plan had suggested they do. Lenders were simply unwilling to participate in the Government’s well-thought-out Plan (grin)!
In addition, the Plan required the homeowner to repay the Federal Government 50% of future profits they made from selling their home in the future. In this case, the homeowner was unwilling to accept this part of the Plan.
So here it is loud and clear: Our elected “officials” on Capitol Hill and in the White House should do a little more homework to “test” any Plan before spending billions of our dollars so foolishly. Most if not all of these “officials” are simply politicians; experts on getting elected, not on running businesses.
The Latest
The Plan has just been tweaked and will now offer incentives for the lenders to refinance troubled homeowners’ mortgages. In addition, the requirement for the homeowner to split the future profits with the Federal Government has been scrapped. Will the new Plan work?
There seems to be little confidence that the modified Plan will do much better by way of lender or public acceptance. The new Plan was recently approved in a House of Representatives vote and has been ushered off to the Senate for their vote on the bill in a couple weeks. I’m curious; have any of them read the bill?
Full CNN Money article: http://money.cnn.com/2009/03/25/real_estate/new_hope_plan/index.htm
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