In writing about the new book recently released by former Federal Deposit Insurance Corp. chief Sheila Bair, a Wall Street Journal columnist notes some of Bair’s assertions about housing policy in the U.S. during her tenure at FDIC, including the notion that some of the Obama Administration’s housing policy was “stupid.”
The WSJ column writes:
Sheila Bair, the former chairman of the Federal Deposit Insurance Corp., came to Arizona for the launch of President Barack Obama’s signature housing plan in early 2009.
But Ms. Bair was never on board with the effort, she writes in her new book “Bull By The Horns.” She recounts that the expansive promises issued at the time made her nervous. As the president spoke, she writes, “I cringed as he threw out what I considered to be wildly inflated numbers” on how many people the loan-modification effort was being touted to reach at the time—up to 4 million homeowners.
Those concerns have been borne out. Currently only about 810,000 homeowners are enrolled in the main Treasury Department loan assistance program, known as the Home Affordable Modification Program. The president’s liberal supporters, who wanted more aid, have been disappointed.
The program put in place by the Obama team was far too complex, Ms. Bair argues. In addition, it required far too many documents from homeowners, as the administration wanted to emphasize its programs only were designed to assist “responsible” homeowners.
“To require every borrower to essentially prove that he or she could qualify for a new loan was stupid—the loan had already been made,” Ms. Bair writes. “Given the huge number of loans that needed to be reworked, as well as the problem of ill-trained, understaffed servicers, the cumbersome process was doomed to failure.”
Obama’s top advisers “were determined to keep me out of the design and operation of any of the programs from the very beginning,” Ms. Bair writes. The program, she writes, was “designed to look good in a press release, not to fix the housing market.”
Written by Elizabeth Ecker