WASHINGTON - President Obama’s plan to fix the foreclosure crisis has been a dud, putting the housing market recovery at risk, predicted Mark Zandi, chief economist at Moody’s Economy.com.
Hopes were overinflated when Obama unveiled the program before an audience of Arizona high school students last February. Almost a year later, it appears about 750,000 homeowners - a fraction of the 3 million to 4 million projected - might complete the application process, Zandi said.
The more borrowers who can’t be helped, the more foreclosed properties will flood the market. And that means the nation’s housing market, which appeared to recover last summer, could soon take another turn for the worse.
A record 2.8 million households were threatened with foreclosure last year, up more than 20 percent from a year earlier, RealtyTrac Inc. reported this week. The foreclosure listing firm expects another record this year.
Home prices, meanwhile, are down 30 percent nationally from the peak in mid-2006, and there is mounting evidence they will fall again over the winter as low-priced foreclosures make up a larger proportion of sales.
“It’s a very serious threat to the housing market, and still one of the most significant risks to the broader recovery,’’ Zandi said.
The Obama plan aims to help borrowers in financial trouble by making their payments more affordable. Modifications made under the program include a lower interest rate and often a longer repayment period. The average monthly payment has been cut by $500 on average.
The homeowners receive temporary modifications, which are supposed to become permanent after borrowers make three payments on time and complete the required paperwork.
For the first time, all 100 members of the chamber will have their own cloistered hideaways in the US Capitol, traditionally a coveted mark of seniority and clout that lowly freshmen could only dream about.
This year, even junior senators will get their own private, unmarked offices that are steps from the Senate chamber.