The White House is out with a new housing plan, but not everyone is thrilled. Speaker John Boehner (R-Ohio) thinks the program is history, bad history.
“We’ve done this at least four times where there’s a new government program to help homeowners who have trouble with their mortgages,” said Boehner.
We last wrote about the Hope for Homeowners program (H4H) just over a month ago, when we noted that after five months, the $300 billion program had helped exactly one homeowner.
How has it done now that it’s been in action for six months? No progress:
The numbers are in. During its first five months in operation, Hope for Homeowners (H4H) — a program slated to help 400,000 homeowners avoid foreclosure — has officially only helped one. Yes you read that correct, one:
“As it stands now, we’ve only gotten 752 applications,” said Federal Housing Authority spokesman Brian Sullivan. “And only insured one loan. Needless to say, the program isn’t working terribly well.”
As soon as I saw the title of this Fortune Magazine article I couldn’t help myself. While sometimes laughter is the best medicine, for now let us take in the seriousness of this list, and allow it to teach us something from the ill-fated decisions that permeated through 2008 (then we’ll shake our heads and say “wow!”):
1. Detroit execs flying to D.C.: The chief executives of General Motors, Chrysler and Ford spark outrage when they fly their corporate jets to Washington D.C. to beg Congress for a multi-billion dollar bailout. More
After an unsuccessful start and poor future projections, the Department of Housing and Urban Development (HUD) has made changes to their Hope for Homeowners Act (H4H) in order to reduce costs for both lender and borrower, expand eligibility, and lower borrowers’ monthly payments.
“Clearly, meaningful changes were needed. These modifications should increase lender participation and help more families who are having difficulty paying their existing mortgages, but can afford a new affordable loan insured by HUD’s Federal Housing Administration,” said [HUD Secretary Steve] Preston.
The federal initiative to kick foreclosures began in earnest on October 1 of this year when the “Hope for Homeowners” (H4H) program, part of the Housing and Economic Recovery Act of 2008, was put into action. Unfortunately, so far the program has proven to be a dud — such a disappointment that, according to CNBC’s Diana Olick, HUD took their projection of helping 400,000 homeowners avoid foreclosure in three years off of their press release (dated October 1, 2008). The program which carries a budget of $300 billion will, based on the latest projections, only service 19,000 homeowners in the first year:
The program works like this. A borrower in trouble contacts the lender, and the lender agrees to write down the principal to 90 percent of the current value of the property. They then get a new FHA insured loan. In return, when the borrower eventually sells the house, the government gets half the equity that is created after the new loan begins: in other words any appreciation. FHA will insure up to $300 billion in new loans.
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