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Administration's Housing Bailout: The Big Disconnect

I spent the bulk of the morning sweltering outside the Washington DC Convention Center, as a few thousand sign-wielding housing advocates waited for President Obama's motorcade.

foreclosure protest
CNBC
foreclosure protest

The president was making a speech at the Urban League, but it just so happened he was doing it a few floors above a marathon mortgage modification event, run by the Neighborhood Assistance Corporation of America.

When I initially referred to the crowd as "protestors," I got in a heap of trouble.

"No, no, no," they all started shouting at me.

"We're not protesting; we're trying to get his attention," said one woman carrying a big orange sign. They simply want more government money for low-income home ownership and mortgage modifications. By and large they were Obama supporters, who felt that the president had focused too much attention and money on the banking industry and not enough on the housing market.

Two years ago the Obama Administration pledged $75 billion for the housing bailout, but only a fraction of that has been spent so far. Still, two days ago the U.S. Department of Housing and Urban Development (HUD) announced that "$79 million is available for a broad range of housing counseling programs to help families find and preserve housing."

That's an increase of 27 percent over last year.

"The counseling programs this funding will support are crucial in helping thousands of families avoid foreclosure and remain in their homes," said HUD Secretary Shaun Donovan. "Every day, our HUD-approved counseling organizations help families to make more informed choices about buying or renting."

"Every day, our HUD-approved counseling organizations help families to make more informed choices about buying or renting."" -Secretary, HUD, Shaun Donovan

What's so ironic is that the organization behind today's protest, the Neighborhood Assistance Corporation of America, is a non-profit, community advocacy and homeownership organization. In fact, according to its web site, it is the "largest housing services organization in the country." It is also a HUD "intermediary counseling agency," which means it gets plenty of federal funding for its programs.

So there you have the head of NACA, Bruce Marks, a huge Obama supporter, organizing around two thousand people for what looks like a protest but is really a "cry for help," according to one woman in the group.

It feels like a connection, or perhaps an opportunity, is being missed here.

Questions? Comments? RealtyCheck@cnbc.com

  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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