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The Non-Mandated Society: Why Obama's Mortgage Programs Fail





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To expect banks to care about Americans over their global shareholders is asking banks to become 'persons' rather than corporate persons. When programs come from Washington as guidelines rather than mandated, banks use them to maximize profits at the expense of those the programs are meant to help.

That would seem a harsh statement until one takes into account disturbing reports that support such a conclusion. It became more evident recently with a multi-billion program the Obama Administration sent to states hardest hit by the recession to provide emergency mortgage loans to the unemployed. It was not altruism. This was initiated to save the tax base in middle class neighborhoods -- an essential ingredient to economic recovery. The program had been anticipated by struggling homeowners who'd waited a year for their states to initiate the program that would give them loans to cover their mortgage payments for up to two years.

President Obama established the Hardest Hit Fund in February 2010 to provide targeted aid to families in states hit hard by the economic and housing market downturn. Each state housing agency gathered public input to implement programs designed to meet the distinct challenges struggling homeowners in their state are facing. States were chosen either because they are struggling with unemployment rates at or above the national average or steep home price declines greater than 20 percent since the housing market downturn.
While investigating the program's implementation in California, I came across what may be the primary reason that the Obama Administration mortgage programs out of their Treasury Department have such an abysmal track record of achieving their stated goals.  Continued...


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