Obama's Housing Plan a Howitzer

You wouldn't know it from the republican outcry but some say Obama's housing plan is a good one.

NPR: Some people in the mortgage industry think the president's plan is bigger and better than anything they've seen to date. Howard Glaser, an industry consultant and former Housing and Urban Development official in the Clinton administration, is one of them.

"For the last two years, the government has been employing a squirt gun to put out the forest fire in the housing market," Glaser says. "The Obama plan is a howitzer aimed at the problem, by contrast."

Flipping The Calculation

Glaser says previous government and bank plans designed to modify loans haven't worked because it made no financial sense to most of the parties involved.

Even if the borrower — the homeowner — could afford a lowered payment, Glaser says most investors weren't game because investors stood to make more money letting a home go into foreclosure and reselling it than working out a deal with the homeowner.

And the mortgage servicer — the company hired to administer the loan — faced a similar situation. Modifying a loan required more time and paperwork, so the servicer actually stood to lose money.

Obama's plan addresses these issues by throwing money at them, Glaser says. It will pay loan servicers to modify loans, and it essentially will subsidize modified mortgages. In other words, the government will kick in money to make sure homeowners pay no more than 31 percent of monthly income — whether it's less in interest, or less in the principal loan amount.

"It flips the calculation, and in the vast majority of cases will make it a better deal for the investor to modify the loan than seek foreclosure," Glaser says. "That economic driver is everything."

Here's another who thinks the plan is a good one and yet another, who likes some aspects of the plan.
Shaun Donovan, HUD secretary:

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Michelle Obama Visits HUD

Michelle is making the rounds, it seems, visiting all the departments. Monday, she spoke to the staff of the education department. Today Housing and Urban Development:

NYT: First Lady Michelle Obama promoted President Obama’s economic stimulus plan on Wednesday as she rallied hundreds of government employees at the Department of Housing and Urban Development.

The government workers clapped, cheered and snapped photos in a packed auditorium as Mrs. Obama told the crowd that the stimulus plan would expand the availability of affordable housing, weatherize homes and help families hurt by the foreclosure crisis, among other things.

She's taken on the role as morale booster, telling staff that they do important work.

Obama Picks Ron Sims for Deputy HUD

Ron Sims appears to be well-liked in progressive circles, which means we'll have someone who actually cares about affordable housing. Here's his bio.

NW Progressive: As Deputy Secretary, Ron Sims will be the No. 2 man at the Department of Housing and Urban Development, working for Secretary Shaun Donovan. Sims will be in charge of HUD's day to day operations. The Department's annual budget is about $39 billion and it has 8,500 employees.

Seattle Times: Sims announced Monday he is going to Washington, D.C., intending to take a job as deputy secretary, No. 2, at the U.S. Department of Housing and Urban Development. He needs Senate confirmation.

Rumors of his departure have been swirling for months. A lot of people around here are fed up with him for one reason or another. But I say D.C.'s gain is our considerable loss. Sims has undeniable leadership qualities that will be missed.

He is not afraid to take stands that aggravate colleagues in government. In 2007, he changed his mind late in the game on a very expensive and poorly thought-out road-and-transit spending plan. In doing so, he violated accepted Northwest process for challenging groupthink and took a ton of flak for it. In the end, I thought it took real guts to stand up and say, on second thought, he opposed the plan. Voters agreed with him.

Sims is a big-picture guy. He is a passionate booster of mass transit and environmental policies. The son of a preacher from Spokane, he is easily the best public speaker in our region, which means he can articulate a vision and persuade others to follow.

Sims statement today:

STATEMENT OF RON SIMS REGARDING
NOMINATION TO BECOME DEPUTY SECRETARY OF HUD

February 2, 2009

President Barack Obama today announced his intent to nominate me as the next Deputy Secretary at the U.S. Department of Housing and Urban Development. I thank the President for this honor. I am deeply grateful and overwhelmed by his trust and confidence in me.

I also want to thank Secretary Shaun Donovan for his support. If confirmed by the United States Senate, I will serve the President and give his administration and our country my very best.

I want to thank the citizens of King County who have given me the opportunity to serve 12 years as County Executive and 11 years as Councilmember. I cannot imagine anyone more fortunate than I to have spent the better part of my public service career working on issues I care about in a region that I love.

Leaving King County government will be very difficult for me. In my mind and heart, I see and feel the work that needs to be done to complete the transformation of this region into the best place in the world.
Nearly a year ago, the Seattle Times ran my editorial announcing King County’s Equity and Social Justice Initiative. In that editorial I reminded us all that four decades after the dream of Dr. Martin Luther King Jr., we remain a society burdened by vast disparities in wealth, in health and in opportunity. Not just in this country, but
also in our county; the only one in America named after Dr. King.
I wrote with regret that “the gulf between the rich and the poor is widening…” and that “while many of our communities are thriving, others foster conditions that lead to poor health, underemployment, poor education, incarceration, loss of opportunity and unsafe living.”
I lamented that decades of misguided policies at the federal, state and local level have contributed to the problem; policies that have isolated the poorest urban neighborhoods from economic opportunities, and disenfranchised communities trying to do better.
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