Housing and Government: ‘Troubling Dip’ or Double Dip?

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Today the Obama administration released its monthly "scorecard" for the Making Home Affordable Program (MHA), a.k.a. the federal mortgage bailout. The Home Affordable Modification Program (HAMP), which is part of MHA, continues to add trial modifications at about 29,000 per month and permanent modifications, a bit less, at 26,000. The redefault rate on the permanent modifications is now at 12 percent.

This month the administration released the first numbers on its Home Affordable Foreclosure Alternative program (HAFA), which pays borrowers $3000 to vacate their homes through short sales (where the bank agrees to let the home be sold for less than the value of the mortgage) and deeds in lieu of foreclosure (essentially giving the keys back to the bank). Banks get monetary incentives as well for that. So far 4500 borrowers have vacated their homes under this program.

It should be noted that in the past two weeks members of the House of Representatives voted to abolish the government's mortgage bailout, including the HAMP and HAFA programs. It's interesting that in light of that, the usually optimistic administration put forth this statement:

“There’s no question that this month’s figures show a troubling dip in home sales and housing prices,” said HUD Assistant Secretary Raphael Bostic. “While we should not ignore the real impact that the Obama Administration’s programs are having for millions of homeowners and borrowers, these statistics clearly show that housing markets across the country continue to struggle to regain stable footing. We must remain steadfast in our efforts to support homeowners and communities in ways to help advance market stabilization and a transition towards health.”

I've been reporting on what I believe to be a double dipin housing right now.

Apparently the administration is leaning that way as well, despite its reporting that foreclosure activity and mortgage delinquencies are falling. They are calling the market "fragile." I don't question that; I'm just skeptical, given that their programs are under attack, as to why they are suddenly using the "dip" word.

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