This past Friday the Associated Press reported:
Nearly half of the 1.3 million homeowners who enrolled in the Obama administration’s flagship mortgage-relief program have fallen out.
The program is intended to help those at risk of foreclosure by lowering their monthly mortgage payments. Friday’s report from the Treasury Department suggests the $75 billion government effort is failing to slow the tide of foreclosures in the United States, economists say.
Faced with this reality, Media Matters fellow Duncan Black blogged:
Aside from the fact that I’m not happy with certain outcomes, if you do liberalism badly then people get it in their heads that maybe liberalism is pretty sucky. The economy sucks and HAMP was a complete failure, whether deliberately or not, and that’s what people know.
Black is right: the Obama administration’s Home Affordable Modification Program has been a complete failure. But the failure is not due to Obama administration incompetence. It is due to the fact that liberal policies simply do not work in practice. As we predicted at the time:
The prospect that a shrunken mortgage lending system could expeditiously accommodate the 7-9 million borrowers expected by the Obama plan is wishful thinking. The result will be long waits for refinancing that will come too late for some borrowers, and may also crowd out efforts by unsubsidized borrowers to refinance due to the generous financial incentives offered to servicers participating in the new federal program.
It is far past time for the federal government to stop mucking up the housing market. The government should end the interventions it has made since 2008, starting with abolition of the TARP program. It should then abolish Freddie Mac and Fannie Mae and repeal all U.S. government regulatory measures that interfere with mortgage markets.