The Obama admin wants you to know they're here to help with mortgage payments

The Obama administration is launching a brand-new public service announcement to tout Treasury and Housing & Urban Development‘s joint initiative to help progress “the Obama Administration’s broad strategy to help homeowners avoid foreclosure, stabilize the country’s housing market, and improve the nation’s economy.” Via Politico:

“While communities across the country are beginning to recover from an unprecedented housing crisis, too many families are still struggling with their mortgage payments and are unsure of where to turn for help,” said Treasury undersecretary for domestic finance Mary Miller in a statement. “Millions of homeowners have gotten help to avoid foreclosure since 2009. We want to make sure struggling homeowners know today that there are free government resources available to help homeowners avoid foreclosure.” …

The ad emphasizes an Obama administration housing initiative called the Making Home Affordable Program that allows homeowners a way to lower their monthly payments, avoid foreclosure or temporarily suspend their mortgage payments.

“Making home affordable is a free government program.” Is that a huge, glaring red flag for anybody else? I realize that these are tough times and there are many people undergoing real material hardship, but remember what happened when decades of the federal government’s meddling in the housing market came to a head, just a few years ago? I believe we call that little ol’ occurrence, the financial meltdown. The feds’ housing-policy apparatuses are already in dire straits, and as much as Obama just loves to talk about ‘not going back to the same policies that got us here in the first place,’ he is remarkably committed to furthering the government’s self-imposed role in providing politically-edged financial services that the private sector is much better at administering.

But that is not the whole story.  Chapter 2 of the story is the “affordable housing” policies going back many years, spawned by liberals and progressives.  These increasingly extreme and unbalanced policies began the housing bubble even before the Fed’s miscalculations starting in 2001.  Moreover, because of these affordable housing policies, when the bubble burst, and housing prices stopped rising and started deep declines, the resulting damage was far worse. …

The big problem wasn’t caused just by loans to low income borrowers.  The problem was that once lending standards were trashed for these borrowers, they couldn’t be maintained for more creditworthy borrowers.  This let more well-heeled speculators in on the scam, now able to qualify for highly speculative mortgages they could not have qualified for previously.  That vastly expanded the resulting credit risk vulnerabilities for the financial system, and vastly pumped up the housing bubble far more.