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First our top story tonight the Obama administration doubling down on the failed housing program that is costing you billions of taxpayer dollars.
The government today announcing it would extend its main consumer mortgage mortgage modification program -- what's called -- The administration says the program will continue for at least another two years because it doesn't want to hurt the housing recovery.
But there's evidence the government's efforts might actually be holding back the recovery with us now mark Calabria the director of financial regulation studies at the Cato Institute.
-- and this is first of all lousy program was started back in 2009.
We're gonna -- three of four million people didn't happen.
Barely helped one million what do you say.
If anything has delayed the housing recovery you've mentioned it's barely helped one million and -- frankly we don't know how many of those million would have made it for this program otherwise.
Of these have just been reductions in the interest rate.
80% of the money has actually not -- -- to homeowners would have gone to the banks and investors.
So large part of what -- -- it is simply paying banks to take losses that they would have taken otherwise.
Right but again but you -- I'm mark mark let's underline that point there because I don't think a lot of people understand that.
I I think most people think that can't.
Set money directly to the pockets of people who work in foreclosure.
And having major financial problems in fact it was the banks who were actually bailed out and -- told you got to change these mortgages modify them.
Lower the interest rate now ultimately that did help consumers but I have to tell yet.
Look this -- bank bailout program when you get right down to it.
Absolutely you keep in mind is it really -- have a go for the banks to have lowered interest rates in this environment anyhow right for them to take a mortgage that was 7% and make it 4%.
And then we the taxpayer right the -- a check for doing not.
That's a bit so aside I would certainly agree this has been a big plus for the banks it's been a little bit of applause for consumers because most of the money is not -- yeah.
Homeowners let's -- this out OK so they're gonna do this for another two years right.
Which means it can be pumping money into the system now I realize it's not a lot of money they have five point two billion budgeted for -- -- -- which they had almost thirty billion budgeted for it they've only spent five billion.
But I have to tell you assume he's taken out now is the time that you -- the housing market full of money federal money really.
You know coming up the bottom in some markets it's on fire in some places people are saying it's a bubble so it seems to neat that you're playing with fire here.
I would agree -- you know and but the problem for most homeowners in default is not the housing market now we've got -- prices going up a lot of markets and its double digit increases in places like Las Vegas and Phoenix.
The problem for most of these borrowers is the labor market the problem -- they've lost their job you know and we really need to address the labor market is a problem and wrap -- these back.
-- -- points what about you know this issue of Rita faulting in this program a -- 300000 people.
Had been bail that this program and then they'd have fallen well again I mean what is this for why are we spending these taxpayer dollars honestly.
It's it's almost unconscionable to me need them out of what I would call -- in this -- -- default rates within the program is close to 40%.
You know if you look at the overall delinquency rates in the mortgage market today.
Over half of foreclosures were people who are already in foreclosure at some point in the past.
So again you know it's like we put someone in the program we pretend their current six months later nine months later -- fallen behind again.
And so a lot of I would -- Fortis is basically accounting fraud were trying to make all these loans look current that really aren't.
But of course part of that's because we don't want the banks to recognize these loans aren't any good.
But ultimately it's really just keeping people a month -- You know if you don't even little amount not letting the market knew it do what it needs to -- and I have to tell you if you -- this housing market alone now it's gonna recover.
It's gonna get better jobs and if you get in the way down your playing with fire mark thanks for coming on always get -- was -- -- He was well.
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