RightChange: Foreclosures On the Rise Despite Obama’s Housing Stimulus

President Obama and the Democrats think the best thing to do for an ailing market is to give it a dose of Stimulus.  The first plan artificially lowered interest rates to 4%.  The second plan forced government mortgage lending giants, Fannie and Freddie, to pressure banks to reduce the mortgage loans for the same homeowners that cannot afford their homes. He couldn’t get it past Congress, so he instated it via executive order. HAMP, HARP, and all of the other feel good housing assistance plans are not working.

From CNBC:

“After a year-long reprieve from rising foreclosures, the numbers are going up again.

One in every 624 U.S. households received a foreclosure filing in January, up 3 percent from the previous month, according to a new report from RealtyTrac.  Foreclosure activity froze in many states in 2011, due to processing delays after fraud, or so-called "Robo-signing," were uncovered in the fall of 2010.  The thaw is now on.”

How many stimulus programs is it going to take?  How many trillions of dollars has to be wasted? How many more people do we have to blame?  If you want to own a home, you need to be able to pay for it.  As Rep. Spencer Bachus (R-AL) says, the best remedy for the housing crisis is a job.  While he is spot on, we have to reform the bad government policies that brought us to this point. 

The policies from the Clinton administration pressured Fannie and Freddie to pressure the banks to write loans to risky buyers.  These buyers lacked personal responsibility and moved into homes they could not afford. Mortgage brokers, realtors, and Wall Street preyed on the situation.  All are to blame, but it was ultimately the government who orchestrated this environment.

President Obama’s Wall Street reform bill was supposed to fix this, but instead, it put Fannie and Freddie on the same reckless path that led us to where we are.  It was a smokescreen that allowed Obama and the Democrats to preserve their stake in Fannie and Freddie.  They have opted to flush taxpayer dollars into a failing market.

The government needs to stop wasting money we do not have and get out of the housing businesses.  The best anecdote is the free-market.

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