HARP Plan Does Nothing for Unemployed

October 28, 2011

President Barack Obama, this week on a three-day road trip as much as a presidential candidate as the leader of our struggling country, unveiled plans in foreclosure-ridden Nevada to help underwater homeowners stay in their homes.

Obama’s plan rewrites the Home Affordable Refinance Program (HARP) rules to help non-delinquent homeowners refinance their mortgages from high rates to today’s record-low mortgage rates, regardless of how much their homes have fallen in value.

For more details, see our story at Chicago Real Estate Forum.

message in a bottle: Market in Crisis! Send Help!Many economists believe that the collapse of the housing industry caused the 2008 financial crisis. Today, mortgages that exceed home values continue to bring the economy down.

Unfortunately, the other main issue weighing down the economy is the job market. How will the unemployed and underemployed benefit from the President’s plan?

“It is encouraging that the Obama Administration is beginning to turn its attention to restoring the nation’s housing market, which is crucial for the health of our economy,” said National Association of Home Builders Chairman Bob Neilsen in a statement on the proposed changes to HARP.

“However, for the many families who have fallen behind in their payments because of the weak job market, the changes to HARP will have no benefit. HARP is only open to mortgage borrowers who have remained current with their payments. Clearly, additional policy initiatives are urgently needed to prevent foreclosures and deal with the inventory of foreclosed homes.”

Neilsen also pointed to other factors that are having a detrimental effect on the housing recovery:

*Overly restrictive mortgage lending standards

*Inappropriate credit limitations on home builders

*A broken appraisal system that is contributing to housing price stability

“We still have an enormous amount of work to do to repair housing,” said Neilsen.

“The HARP changes are a good step, but our leaders in Washington need to quickly focus on a broader range of actions for improving the housing marketplace. It has taken a painfully long time for them to recognize that housing is indispensable to the job creation and growth that have been sorely lacking since the end of the recession.

“The American people are losing patience and they expect far better economic prospects than those they are finding today, which stem in large part from neglecting housing.”

Categories: Economy, Featured

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