Today a debate weary America turns the clock back once again to 1946 in their vain attempt to look to new housing as some sign of an expanding economy, while foreclosed homes, in decline, still wait fallow in the wings of banks accounts in the "not counted" column.
HARP II with 413 days to run allows homeowners under water to get refi'd at new rates, and HARP III is coming mid year to extend even further the ability for people no matter what the loan to value of the house is, to get better loans.
The problem is not the program, the problem is getting banks to play--the reality is you'd better be closer to 90-100% loan to value, you'd better steel yourself for a "no sale" and the credit relaxation rules are not being abided to. If you're looking at 3.5% for regular 80/20 folks, best look about 3/4 points higher--if you're stuck in any loan above 5% you might make out, if you're currently in an adjustable rate mortgage you'd probably make out UNLESS you're enjoying 3% rates now. The bottom line is, the program helps some, but not nearly the number required, and certainly means that monetization, meaning the depreciation of the dollar compared to any "thing" "must" continue.
And HARP still fails to include folding in second loans or HELOCs--don't expect relief there.
So stay tuned as America stays breathlessly addicted to the fiction that housing always goes "up"--when in actuality it's your currency going down.
That's how we got to having $100K salary replace $10K a year--it's because the 1971 Corolla at $1875 is now $18750, the $40K house now $400K, 39.9cents per gallon gas now $4, and the $4.35 silver ounce, now at bargain prices anything less than $43.00.
15% RISE in new housing, and low and behold, everybody forgets that the glut of housing is still out there. HARP I and II are making a difference in getting foreclosures under wraps, but folks are still out of work and neither candidate has come up with credible fix its.
Obama is the last to mention it, but the rate of Fed employees getting out and jobs being abolished is a knee in the rehiring posture--we may not like the value detracted from such jobs, but a salaried employee is a salary that can buy something, a far better boost to the people end of the economy, job for job, than making widgets.
But the country is as mired in new housing being a picture of "health" as it was saying housing "always" goes up. I don't know how that game of musical chairs ends or when, but take it while you got it.