Following yesterday's unveiling of the White House's $75 billion "Homeowner Affordability and Stability Plan," reactions ranged from cautious optimism to disappointment to cheerleading, but if there was a foreclosure reaction meter, the arrow seemed to sway more towards the "cautious optimism/who the hell knows what's going to happen anyway" side of the chart. The short list of reactions:
What is this thing? Q and A from the CBS News. "How long will this program last? After three years from now, no more homeowners will be eligible."
I have an MBA and I am still confused: Another Q and A from the Chicago Tribune. When do these programs go into effect? "Details will be released March 4, but administration officials said the new programs are in effect immediately. Much of the plan does not require congressional approval."
What the critics say: Calculated Risk: "The Obama administration doesn't understand that there were two types of speculators during the housing bubble: flippers (they are excluded), and buyers who used excessive leverage hoping for further price appreciation..This plan rewards those homebuyers who speculated with excessive leverage. I think this is a mistake."
And more critics: Wall Street Journal: "Truth is, many of the “credit challenged” borrowers won’t even get to running the numbers. They simply will have no interest in sitting down with a bank officer and going through pay stubs and tax returns. Income verification? Are you kidding? That’s why many took the subprime mortgage in the first place. That millions of homeowners were and are “irresponsible” is a harsh truth that Obama can’t really talk about."
Cautious optimism, Los Angeles Times: "The number of people who are "underwater" on their mortgages has risen to 10 million to 15 million, but the Obama initiative aims to help only 7 million to 9 million, said Patrick Newport, an economist with IHS-Global Insight. "Obama's plan is an ambitious one, more ambitious than analysts had been led to expect," he said. "Whether it will stop the bloodletting, however, time will tell."
What the editorials say: Washington Post: "The plan wisely focuses on preventing salvageable mortgages from going bad, rather than promising a lifeline to every subprime borrower. It is also an improvement over past efforts in that it offers servicers an incentive to rewrite loans; this might spur some to overcome mortgage-security investors' resistance to modifications. J.P. Morgan Chase chief executive Jamie Dimon said yesterday that the plan could help his company rewrite more than a million mortgages."
More editorializing from the Arizona Republic: "President Barack Obama's mortgage-rescue plan aims directly at the source of the nation's economic sinkhole. With Wall Street bailouts showing little success, it's Main Street's turn. The twin villains of the housing market - falling home values and rising foreclosure rates - are grimly familiar to Arizona, so it was fitting that Obama came to Mesa to unveil his plan."
Thank you dear god that Bush is out of office, Fox News: "Obama chose Arizona, a state which voted against him, because the state leads much of the nation in foreclosures. Obama didn’t just fly over the state on Air Force One and look down at the foreclosure signs for a photo-op. Instead he landed and exhibited the kind of leadership this country has not seen in the last 8 years."