I said in my initial story on the new refi plan for Fannie and Freddie-backed homes that it’s not a housing plan, but a stimulus plan. Really important to keep that in mind. The housing market is depressed because of $700 billion in negative equity. This plan wouldn’t touch dollar 1 of that. It’ll put some more money in people’s pockets if they meet certain guidelines.
You know this, because Dan Pfeiffer on a conference call just said that “this is not a substitute for the American Jobs Act, but it is an effort to show that we are doing do everything we can.” They even have a catchy slogan for it: “We Can’t Wait,” designed to show that, despite a gridlocked Congress, the Administration is taking action. So anyone who tells you this is a fix for the housing market should be pointed back to all of this. It’s just a stimulus, one that is targeted to underwater borrowers, and I can think of worse targets.
Enough of the brush has been cleared out, the barriers to refinancing, that it will be more in all the stakeholders’ interests to actually do it. On a conference call just now, HUD Secretary Shaun Donovan explained some of those steps:
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