Should the government stop trying to prevent foreclosures?by Tim Manni
A top Republican on the House Financial Services Committee said Monday that the government should abandon its efforts to save homeowners from foreclosure.
Rep. Randy Neugebauer (R-Texas), the chair of the committee’s Oversight Subcommittee, told housing experts that government attempts to prevent foreclosures is prolonging the inevitable for many struggling homeowners and impeding the private market.
“All these foreclosure mitigation initiatives we’re taking need to stop,” he said, speaking at an event co-hosted by the University of Maryland’s Robert H. Smith School of Business and the NYU Stern School of Business.
To be fair, I have certainly been quite critical of the federal efforts taken to help homeowners avoid foreclosure. In my opinion, the programs and initiatives have largely been ineffective and have failed to live up to their goals. Our readers express frustrations day in and day out about how misleading efforts like HAMP appear.
Our latest comment from reader Sherry is unfortunately a frustration we have heard many times before:
It has taken nearly a year for our HAMP application to get through our lender… We have had to provide the same paperwork every 60 days. Finally, a week ago we were told that we were denied. We have asked for an explanation as to why and we were told that they do not have to give us one, but that we can reapply. How do consumers know if their loans are really being considered or are we just being shuffled through the system time and time again?
Do I think overall that HAMP and HARP have failed at what they set out to do? Yes. Should they disappear entirely overnight? No. It’s hard to tell homeowners like Sherry that these efforts are no longer available. Despite a lot of negative reactions we get from readers, there have been a few stories of success.
Readers: What do you think? Should government efforts like HAMP be terminated before they’re slated to end? Should these efforts and funding be directed towards some other form of assistance? Do you agree with Neugebauer when he says “We’ve got to get the government out of the way here … [and] let the market do what it needs to do”?
(hat tip: The Wonk Room)