WRONG
TURN
sought a medical forbearance after
a car accident. Diab says she went
through three different loan modifications only to discover that the
bank had foreclosed more than a
year before.
Depressed, Diab recently went
to see her doctor. “I’m going to
write you a prescription for 30 valium and write myself a prescription for having to hear this,” she
said her doctor told her after listening to her story.
The failure of Obama’s plan to
live up to its promise has hindered the economic recovery. Had
the plan hit its targets, the foreclosure crisis “would be history,”
said Mark Zandi, chief economist
at Moody’s Analytics. The housing
recovery that began earlier this
year would have begun in earnest
in early 2011, and by now default
rates would be back to historical
norms, he said. Today, opinions
are divided on how how long a full
recovery will take, with forecasts
ranging from one year to three.
As it is, while foreclosure rates
have come down and sale prices
gone up recently, about 1.5 million
homeowners remain in serious
default or foreclosure, according
to Realtytrac.
More than 13 million homeown-
HUFFINGTON
11.04.12
“HAD OBAMA’S
HOUSING PLAN
MET ITS TARGETS,
THE FORECLOSURE
CRISIS ‘WOULD
BE HISTORY.’”
ers collectively owe $650 billion
more than their homes are worth.
“That is a serious weight on
the economy,” Zandi said. “These
households are struggling, homeowners are not spending, banks
are leery of them.”
This turbulence has helped
depress prices, punishing middle
class Americans, who rely on
their homes for the greatest part
of their net worth. According to
the most recent numbers available from the Federal Reserve,
the value of this investment
plunged 40 percent from 2007 to
2010, to $55,000.
The slow recovery has also held
back employment, as millions of
construction workers, mortgage
brokers, electricians and others
who depend on a robust housing
market remain sidelined. Three of
the states up for grabs in the 2012