Treasury Secretary Paulson's Hope Now Program is Proving Insufficient
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According to Bloomberg News today, "Newly delinquent mortgage borrowers outnumbered people who caught up on their overdue payments by two to one last month, a sign that nationwide efforts to help homeowners avoid default may be failing.
"In April, 73,880 homeowners with privately insured mortgages fell more than 60 days late on payments, compared with 39,584 who got back on track, a report today from the Washington-based Mortgage Insurance Companies of Americasaid. Mortgage insurers pay lenders when homeowners default and foreclosures fail to cover costs.
"`It's going to take a while before you see the impact of the government's plans, if you can even see a discernable one,' Steve Stelmach, an insurance analyst at Friedman, Billings, Ramsey Group Inc. in Arlington, Virginia, said in an interview.
"In April, a record 183,000 homeowners were able to work out new borrowing terms with lenders and avoid foreclosure filings, according to the Hope Now Alliance, a mortgage industry coalition formed last year at the urging of U.S. Treasury Secretary Henry Paulson," (Bloomberg.com, 5/30/08).
For two months I've seen the Hope Now program come up short in all of it's promises and efforts tocorrect the mortgage/foreclosure crisis. Any assistance that it's provided to borrowerswould havelikely been given by the lender itself. Even people within the Fed are realizing the shortcomings ofHope Now, as Sandra Braunstein,the head of consumer and community affairs at the Fed, told the Conference of State Bank Supervisors at a meeting in Florida last week, "The Hope Now program has so far proven insufficient."
For all the critics of a "homeowner bailout," regardless if you support or opposeany of the plans thatare making their way out of the House, Senate and White House, think about how manyother different people are inadvertently affected by this quagmire: Renters, Insurers, Investors, The Credit Worthy, Students (they're finding loans for school more difficult to come by), Auto Industry, etc.
Something needs to happen before this administration exits in January, and I hope they can figure it out nowinstead oflater.