Home, Home I'm Deranged, Part 27

The Obama administration will reveal this week their newest effort to try to fix the housing depression, focusing on homeowners underwater on their mortgages.

Homeowners who owe more than their houses are worth will get new help to refinance in a government plan to be unveiled as early as Monday to support the battered housing sector, sources familiar with the effort said.

The Obama administration has been working with the regulator for Fannie Mae and Freddie Mac to find ways to make it easier for borrowers to switch to cheaper loans even if they have little to no equity in their homes.

The regulator, the Federal Housing Finance Agency, intends to loosen the terms of the two-year-old Home Affordable Refinance Program, which helps borrowers who have been making mortgage payments on time but who have not been able to refinance as their home values have dropped.

Officials have been frustrated that attempts to bolster housing -- the epicenter of the deepest U.S. recession since the Great Depression -- have borne little fruit. Some top Federal Reserve officials want the central bank to consider buying more mortgage-backed securities as a way to help.

And while it's a good idea, allowing underwater homeowners access to better mortgage terms isn't going to fix the problem.  The real issue has been and remains the massive number of foreclosures clogging the market and driving housing prices down.  Somebody needs to buy those mortgages, but the banks are broke and so is the American consumer.  The government should step in with another Depression-era style program to buy up these homes, but of course Republicans continue to block any efforts to fix the economy unless the effort only improves the top one percent's balance sheet.

Oh, and let's not forget the greedy banks that put those millions of new foreclosures on the market with robosigning shenanigans too.  The right continues to want to blame House Democrats and "government loans given to minorities that couldn't repay" but the simple fact of the matter is government subprime loans had much stricter standards than the ones issued by banks.  Private lenders who were not subject to these lending standards made the bad loans, not Fannie Mae, not Freddie Mac, and not the lenders who made Community Reinvestment Act loans.

Republicans are trying to do everything they can to pin the financial crisis on Fannie and Freddie and not Wall Street, but gosh, nobody's buying that garbage.  Just look outside.