Austin Texas Real Estate: Â Republicans are planning to kill several White House plans aimed at keeping borrowers close to foreclosure in their homes.
The plans on the being threatened include the Home Affordable Modification Program, the Neighborhood Stabilization Program, the Federal Housing Administration Refinance Programs and the Emergency Homeowner Relief Fund and would save about $38 billion.
The mortgage modification program has faced criticism because of the lack of success and is only delaying what needs to happen plus slowing the recovery. The constant delay could force the real estate market to delay for years. The natural cleansing of the capitalist market needs to take place with artificial delays.
Another other issue at hand is fining numerous banks for robo signing. If the government does succeed in fining the banks this will incite litigation among millions and delay more foreclosures that will happen over time anyway. This will freeze up banks equity because they cannot clean their books and will need reserves for litigation.Â All this forces the banks to work on their internal safety rather than producing more loans to help the market recover.Â
Always let the market naturally correct itself and do not interject money programs to try to heal the downfall because all that is left is less government funds and a slower recovery.