I was reading an article this morning that President Obama was in Vegas yesterday, announcing that he wants to expand efforts to help struggling homeowners to refinance their loans. The initiative is known as the Home Affordable Refinance Program (HARP).
I have a few thoughts and questions about HARP:
Who is providing the gambling chips for this program? The US taxpayer?
And how, exactly, is saving people a few bucks on their past due mortgage payments going to help the overall economy and the housing market?
And couldn’t you make an argument that HARP could actually hurt the housing and the economy? Investors may stop putting money into mortgage backed securities if they think the government can randomly change the yield. Why don’t we just let the market forces clear out the foreclosure mess? Let new home-buyers have an opportunity to purchase a house or a condo without the government inflating market housing prices.
Nevada (Vegas) has one of the highest foreclosure rates in the country, by far. I’m sure this housing speech was a jackpot win for the Obama campaign. But is it a sucker’s bet for U.S taxpayers?
File Under: What’s said in Vegas, should stay in Vegas.
