Wells Fargo: Government aid won’t help housing market
November 4, 2011
FORT LAUDERDALE, Fla. – Nov. 4, 2011 – The Obama administration’s plan to help more homeowners refinance underwater mortgages may be a big deal in South Florida, but the lifeline won’t have a significant effect on the nation’s housing market, Wells Fargo Securities predicts.
Nearly half of homeowners with mortgages in Broward and Palm Beach counties are underwater, according to research firm CoreLogic. They’re hoping an expansion of the Home Affordable Refinance Program will help them refinance at current interest rates and get them out from under burdensome mortgages.
But it isn’t government intervention that will solve the housing mess, but rather a gradual clearing of the “mountain of foreclosures,” according to an October housing report from Wells Fargo.
The HARP restructuring still involves strict criteria for which homeowners must qualify, a frequent complaint since HARP began two years ago, said Anika R. Kahn, an economist for the bank. And the expanded program still doesn’t do anything to promote home sales.
“The best medicine for the market is time,” she said.
Speaking of time, if your home was in foreclosure in 2009 or 2010, you have until April 30 to request an independent review of the process.
Homeowners who were found to be hurt financially by lender errors or other problems may be entitled to cash, according to the Office of the Comptroller of the Currency, which announced the review program this week.
The program is part of a deal struck between banking regulators and lenders as the two sides discuss a settlement of the “robo-signer” controversy last fall.
Copyright © 2011 the Sun Sentinel, Fort Lauderdale, Fla., Paul Owers. Distributed by MCT Information Services.