“…and it’s NOT a perfect world.”
In a town hall meeting this week on his cross country bus tour, President Obama got an ear full from a Realtor who said directly to him, “The loan modification system has been a nightmare and the lenders are so tight and you have to be so perfect. And it’s not a perfect world.”
She noted that in the spring, the market was gaining traction but went cold when what she called the “debt ceiling fiasco” added uncertainty to the market.
“We have no consumer confidence after what has just happened,” she told President Obama. “I should be out working 14 hours a day and I am not.”
President offers a solution: wait
Obama agreed with her that the debt ceiling situation was tense and that negotiations were last minute and it hurt consumer confidence. “It was inexcusable,” he said. He noted the administration was considering several alternatives that would encourage banks to get back to lending, but offered no specifics or timetables. He pointed to companies hoarding cash rather than investing and that even banks that are financially sound are not lending.
Obama offered to the Realtor that growing the economy will trickle down to housing but that it is a process that will take time.
A far different tone
This tone is far different than at a town hall meeting in April of this year shortly after announcing he was running for re-election. At that time, the President called housing “the biggest drag on the economy” and advised that it was smarter for some people to rent, but that his administration would be working diligently on solving the problem, all the while, he exuded confidence that he could solve the housing crisis.
The June FHA Assessment report called the Obama proposal for FHA loan limits ineffective and the Administration’s loan modification program HAMP has been an absolute disaster, as the Realtor alluded to in her comments to the President.
Could this really be the solution?
Now, the Administration is proposing, among other ideas, to rebrand Fannie Mae and Freddie Mac as a solution. Regarding this potentially fruitless move, Neil Cavuto of Fox News said, “More often than not, a new paint job ends up being the same snow job. Sometimes the jury remains out on name changes, like Kentucky Fried Chicken changing its name to KFC as if folks still didn’t still don’t know it’s fried chicken. Now it’s F chicken. are you F serious?”
Joe Loomer
August 19, 2011 at 5:36 am
"He pointed to companies hoarding cash rather than investing and that even banks that are financially sound are not lending."
Hmmmm. I wonder why they think they have to hold on to their assets. Could it be Europe's fault? France? Greece? Ireland? Portugal? Italy? Wonder if perhaps because they think those dollars they're keeping might be worth something again someday?
Navy Chief, Navy Pride
Ben Goheen
August 19, 2011 at 6:34 am
While I know we don't see things the same way politically, that last statement was F awesome!!
Teresa Boardman
August 19, 2011 at 6:49 am
Yah right trickle down eventually . . sure that is going to happen. It will take time LOL . . Ha!
Missy Caulk
August 19, 2011 at 7:07 am
There is a great article on the Business Insider yesterday on Why Banks are NOT Lending.
businessinsider.com/government-paying-banks-not-to-lend-2011-8
Why on earth is the Fed paying banks not to lend? Well, back in the financial crisis, the Fed wanted to find ways to secretly bail out the banks without it being screamingly obvious to every American that that was what it was doing. And this particular bailout program was one of the more successful ways it discovered of doing that. Over the past few years, this program has secretly funneled about $10 billion in risk-free cash (rough estimate) directly to the banks, just for being banks and not lending. Don't you wish you could get in on that game?
The Fed pays banks about $4 billion of interest a year on that money–the money the banks aren't lending. And bankers get big bonuses based on that interest, for being so smart as to not lend money and instead just take the free interest from the Fed.
Manhattan Beach Realtor
August 20, 2011 at 9:56 pm
The bailouts were to save banks, not to get that money into circulation; doing so would spike velocity –> inflation. A big uptick in inflation would tear down the elaborate wealth transfer system that is the US dollar…
Tina Merritt
August 19, 2011 at 7:38 am
Maybe if our Congressmen were required to go purchase a house using an FHA loan, they would get some sort of idea of what buyer's go through. I wonder how many could actually qualify?????
Paula Henry
August 19, 2011 at 9:27 am
Better yet, let them go through the process of buying a HUD home with an FHA loan, using Bank of America.
trickle.trickle.trickle…..
Randy Pereira
August 19, 2011 at 3:10 pm
Well Said! haha
Lane Bailey
August 19, 2011 at 9:32 am
While I would disagree that the housing crisis is basis of the problem, I would agree that this administration is ineffective, at best. The basis of the problem is the jobs crisis.
With high unemployment, consumers lack confidence… and so even with incredibly low rates and attractive prices, they aren't flocking ot buy homes.
Instead of fostering job growth by encouraging small businesses, this administration has ramped up regulation, is actively trying to raise taxes on those small businesses that are making money, is increasing uncertainty about the future cost of employees through Obamacare and has repeatedly vilified business is general as greedy and unpatriotic.
At the same time, they have taken MASSIVE donations from financial companies, labor unions and trial lawyers… while writing laws to benefit them… laws that have hurt the ability of small businesses to operate.
The housing market will recover when jobs recover. Jobs will recover when there is a climate in Washington, DC that doesn't try to control every aspect of our lives.
sfvrealestate
August 19, 2011 at 4:44 pm
Specifically, what regulations have they ramped up?
Jon Bond
August 19, 2011 at 9:40 am
Wow.. rename Fannie and Freddie, that sounds like the idea of the century. You know every time I'm in debt, I spend money to get myself out of it. Works every time.
As far as banks go yes, loans are still much harder to obtian. I know of a private lender who is making a killing right now on short term loans because most banks are still shy on them.
A system like the one we have right now cant do anything but purge itself. Unfortunately we have become to used to inflated numbers to allow this to happen organically.
Robert Earl
August 19, 2011 at 9:50 am
The idea of renaming Freddie and Fannie is the best. If you do not change the role and the function than you end up with the same outcome. It doesn't take a genius to figure that out.
Victor DeCurtis
August 19, 2011 at 9:52 am
Waiting for this incompetent and indecisive dummy to make a real and substantive decision, is a lesson in futility! Everything he has touched, tweaked or had his "CZARS" do b fiat has turned into a fiasco. Get rid of this bum and give U.S. a reasonable chance to prosper again. It won't happen with him and his cronies running things.
Fred
August 20, 2011 at 2:16 pm
@victor decurtis, don't be a disrespectful idiot, if that's possible, but you should at least try. I'd hate to see what you would do. Everyone is quick to blame that it's taking SO long (over two years, to undo a catastrophe that Bush & Co created over 8)
Roland Estrada
August 20, 2011 at 5:27 pm
Hope and Change – I Hope we get a Change in November 2112. If there is a Republican that comes into office, I certainly the new President will have the guts to truly reform the way government works.
I find it interesting that the Feds can have such a heavy hand when it comes to health care but not when it comes down to forcing banks to make common sense loan modifications.
Roland Estrada
August 21, 2011 at 12:46 am
Fred, it's quite clear Obama is in over his head. Also, you need to do al little more homework my friend. The debacle stared before the Bush administration. Both sides are just as culpable on this. Be a little more inquisitive. Otherwise you end up looking foolish even if someone doesn't come out and say it.
BawldGuy
August 21, 2011 at 5:12 pm
The USSR is still watin' for Obama's strategy to work for them.