NEW YORK, N.Y. — According to ForeclosureListings.com research, of the 895 campaign promises that Barack Obama pledged, only 3 of the dozen concerning the housing crisis have been met during his first 100 days in office. During his presidential campaign, Obama promised to cut taxes for all but the wealthiest citizens while also placing the country on the path of fiscal responsibility resulting in a “net spending cut.” Difficult choices would be required but so far, the new administration has presented the country with a budget that will double the country’s national debt within 5 years and triple the debt in 10 years says Kevin Simpson, from www.ForeclosureListings.com.
Obama stated again recently that he wants to make permanent the tax cuts for middle class but those expire in only two years, while his promises to cut taxes for small business has been postponed at least until he is no longer in office.
Obama was able to accomplish a foreclosure prevention fund for homeowners. In 2008 he said a $10 billion dollar fund should be enough to help homeowners with subprime mortgages sell or refinance their homes, but as the months passed and the economy worsened, the new amount was $75 billion. Excluded from the plan are investors and speculators, people who fraudulently obtained their loans, and people who were able to purchase homes well beyond their means that even refinancing is not enough for them to meet their obligations to service the debt, explains Kevin Simpson.
Mr. Simpson makes clear that, on the other hand, the plan may become even more expensive because it also provides mortgage holders Freddie Mac and Fannie Mae a guarantee of up to $200 billion. A few of the parts to the plan require Congressional approval (which is currently controlled by a majority of party democrats) but most of the money comes from the Troubled Assets Relief Program (TARP) that Congress approved under George W. Bush in 2008.
Although Obama did keep his campaign promise, the cost to the taxpayers grossly exceeded his promise.
Obama has managed to accomplish the campaign promise of a three-month moratorium on foreclosures meant to give the troubled homeowners some time to “get back on their feet,” even though it has been voluntarily done by banks and not through a secure plan. Since taking office, the government has only persuaded the major banks and many other smaller banks to volunteer to stop foreclosures that began at the end of November of 2008 in anticipation of the government’s plans.
Some borrowers have loans that were sold to funds where no one bank owns their mortgage. Kevin Simpson concludes that, “the plan will have to be as creative in its solution as the lenders had been in their offerings.”
Finally, Obama’s campaign promise to weatherize at least 1 million low-income homes each year for the next 10 years has been included in the final $789 billion stimulus bill, aimed at saving families $400 to $500 in the first year after insulating homes, and repairing or replacing heating and air conditioning systems, and adding smoke detectors as needed, under the Weather Assistance Program. Mr. Simpson explains that the stimulus money will allow the program to help 500,000 homes by the end of 2009 and then to 1 million homes by the end of 2010, which Obama sold as a way to create thousands of green jobs; jobs related to reducing greenhouse gasses and emissions.
The foundation for meeting the goal of 1 million homes a year is clearly set, but time will tell if the stimulus bill will be expanded to continue to help people in the future.
But the most powerful proposal is still in the works, says Kevin Simpson. By allowing bankruptcy judges to modify home mortgage terms to help homeowners who did not buy a house beyond their means but borrowed too much and/or secured loans with interest rates that they cannot afford, “so that ordinary families can also get relief that bankruptcy laws were intended to provide,” Obama announced his plan centered on a $75 billion that Congress will soon vote on.
Also being worked on is a program to prevent homelessness for veterans with a supportive services program “to prevent at-risk veterans and veteran families from falling into homelessness in the first place.” Ideas and structures are being shared by the administration and members of the government for preparation to introduce the program for voting in the House and Senate.
Unfortunately 100 days has not been enough time for the new President to keep several other housing market campaign promises of which no action has yet been taken:
* Create a refundable tax credit equal to 10 percent of mortgage interest for non-itemizers up to a maximum of $800
* Expand homeless veteran housing vouchers to assist those veterans already homeless
* Create a simplified, standardized borrower score called HOME (for Homeowner Obligation Made Explicit) to allow Americans to easily compare and understand the cost of mortgage loans and their obligations, including mandatory taxes and insurance
* Create an affordable housing trust fund to develop affordable housing in mixed-income areas
* Restore housing and increase the supply of rental property in New Orleans
* Expand the YouthBuild program from 8,000 50,000 over eight years allowing low-income young people to work toward their GED or high school diploma while they build housing for low-income people.
* Crack down on mortgage professionals guilty of fraud by increasing enforcement and creating new criminal penalties.
The ambitious undertakings of this President may be made clearer to those who will understand that for decades the United States has been spending billions to assist other countries at the cost of not taking the same approach to spending on its own infrastructure and housing concerns, and finally, it was time to target domestic concerns.
It remains to be seen how these programs will help pay for themselves directly or indirectly with the government in control of dictating the amount that banks will have to write-off as losses, and how much revenue can be generated through the education and training of people that want to be homeowners. The big question that Kevin Simpson, from ForeclosureListings.com, highlights is: Will the concerns of the government translate into meaningful and enforceable laws and regulations that will be adhered to by future creative financiers, such as those who were culpable in the current financial disaster over the past six to ten years and who had help from some members in government?
