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Making Home Affordable (MFA) allocates $75 billion to assist 5 million homeowners (that's $15,000 per home.) So is MFA delivering on its promise to help homeowners? Is it helping to stabilize home prices or is it a waste of taxpayer dollars? Every Wednesday this diary will update you on these questions. We'll give you the best info we can find on MFA's impact, its application process, and its coverage in media (see the June 11 entry for starters). Each update will sum up poll results and comments on your experiences, opinions, discoveries and expertise. Our goal is to link up with other media and with the Obama administration. The President has promised to listen to the American people. Properly handled, this little diary can generate constructive dialog between citizens and the administrators of Making Home Affordable.

So let's get the dialog going!

June 17 Last week's poll had 52 responses and 26 comments from 10 people. Of the 52 responders, some 51% have applied or may apply for help from Making Home Affordable. That's huge! 19%  say MFA is needed to stabilize home prices. 13% are against MFA in principle. This week you can use a streamlined version of last week's poll.  

Judging just from last week's comments, it seems that MHA, so far, is doing more to confuse than to help. Only 2 of 10 commenters, Spudnic and Justsayjoe, reported having positive experiences. 6 commenters - Nada Lemming, Kristina, route 66, esway, Patricia and freshwood - sound confused or worried.

2 commenters gave explanations for the confusion: Taylor324 on the bewildering impact of loan packaging on loan ownership and springtimeforHitler (the name referes to farcical musical by comedian Mell Brooks) on MFA's actual intent:

Never meant to do anything but subsidize banks.  Another give away to Wall St and the quixotic attempts to prop up asset prices. Let prices fall to where they will fall eventually anyway.

Sound cynical? Sure. Hard hearted? Perhaps. But look at last week's comments. I think they tend more to confirm than refute it. Could last week's comments be a tiny yet representative sample of larger public opinion? Let's see who weighs in this week.

Last week I suggested that interested readers email Washington Post Real Estate writer Renae Merle. Her MFA coverage is the fullest I've seen so far. In your email, put a link to this diary in your email and ask her to review comments here. Feel free to do likewise with other writers or public forums out there (I know of nothing focused on MFA so far).

Thanks for your input. You're helping to create an interactive civic media that exists to make citizens and government responsive and accountable to each other. With luck and persistence, we can get the powers that be to listen and respond helpfully to what's said here.

FYI, we're the Chicago Civic Media Project, advancing the dialogic future of American political discourse. This link to our archival site links you to three current sites covering the global financial crisis, Obama-era civic media platforms, and our monster treatment for interactive issue-centered, problem-solving multimedia civic media dialogs.

Originally posted to Inside the Belly of the Mortgage Loan Mod Beast on Wed Jun 17, 2009 at 08:54 AM PDT.


Poll #2: How Do YOU Relate to Making Home Affordable (MHA)

17%4 votes
0%0 votes
21%5 votes
8%2 votes
17%4 votes
30%7 votes
4%1 votes

| 23 votes | Vote | Results

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Comment Preferences

  •  Something to consider (1+ / 0-)
    Recommended by:

    Homeowners Find Mortgage Program Not So Easy
    By Chana Joffe-Walt
    June 9, 2009

    . . .

    Making Home Affordable, an initiative announced by President Obama in February, is designed to help homeowners and banks rework mortgages and avoid foreclosures. But in its first months, the program has proved tougher to use than expected for some homeowners.

    . . .

    Julia Gordon of the Center for Responsible Lending . . . said loan servicers have been overwhelmed since the start of the economic crisis. What's less clear to her is why the incentives for lenders in Making Home Affordable haven't gotten a stronger response.

    "That has been the mystery that has plagued us throughout this crisis," she says. After all, lenders stand to get money from the program for every dollar they save customers on interest, plus they get to keep loans in good standing on their books.

    "So, please stay where you are. Don't move and don't panic. Don't take off your shoes! Jobs is on the way."

    by wader on Wed Jun 17, 2009 at 08:58:47 AM PDT

  •  I am even more cynical... (1+ / 0-)
    Recommended by:

    The equilibrium house price is a little under 3 times average annual salary/wages. Anything above this is unsustainable as we are now finding out. It is better for the government to let prices fall to this level and only help when they overshoot down. Anything else will only prolong the recession, similar to Japan's Lost Decade.

    Note, I am proud not to be an economist and have only applied observation and common sense to trying to understand this problem.

    I voted with my feet. Good Bye and Good Luck America!!

    by shann on Wed Jun 17, 2009 at 09:09:04 AM PDT

  •  There is only one thing that will (0+ / 0-)

    "Make Home Affordable"...

    Lower prices.

    When prices hit levels where buyers can buy houses using traditional, boring financing (~20% down, 30-year fully amortizing terms), then Home will be Affordable.

    That is all.

    Everything else is an attempt, at best, to delay the inevitable, and at worst, to re-inflate the bubble.

    The inflation in housing over the last decade was an aberration, and one that we will not see again in our lifetimes. Traditionally, housing prices appreciate at about the rate of inflation, plus about 1%. Corrected for inflation and income growth, they were, on average, flat for over 50 years. That is normal. Making a profit in a couple of years not by by paying off principal, but through appreciation in the price of the house, is not normal.

    Policymakers and their constituents (houseowners) have not yet accepted this truth. Shielding them from it will not prevent reality from being real.

    There's nothing wrong with the housing market that lower prices won't fix.

    To paraphrase Clinton '92... It's the prices, stupid.


    "It is better to die on your feet than to live on your knees." -- Emiliano Zapata Salazar
    "Dissent is patriotic. Blind obedience is treason." --me

    by Leftie Gunner on Wed Jun 17, 2009 at 09:20:52 AM PDT

  •  Delay is for banks, not homeowners (1+ / 0-)
    Recommended by:

    Housing is still overpriced in many regions. The way that bubbles and housing cycles work, is that they overcorrect. We won't see a return to the "normal" trend line of price to income ratios until we dip well below it. Everything that slows down and delays this inevitable march to the bottom also delays the point at which recovery can begin. The banks have have a huge glut of foreclosed & defaulted properties on their hands, that they holding off the market and not writing down the losses on because the Obama administration has decided that the biggest banks cannot be allowed to fail -- even though they are, technically, insolvent. It looks like the plan is to let the banks leak their losses slowly like a balloon, rather than bursting the bubble all at once. I'm not sure if this is the right or the wrong strategy for the economy overall, but propping up prices is definitely not about making homes more affordable.

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