President Barack Obama, HUD, and Low-Income Homeowners

The Examiner.com is reporting on HUD in a great article regarding the man who will take over HUD. Wendy Gittleson of the North Denver Real Estate Examiner writes:

24 days from today, the man who campaigned on promises of “Hope” and “Change”, will be sworn in as the 44^th President of the United States. You’d arguably have to look back to FDR to see a new administration faced with so many dire challenges. While the cause of our situation is open for debate, it’s up to President Barack Obama to make fresh lemonade from the rotten lemons he’ll be handed.

If you’ve ever turned on a TV, read a blog or newspaper, or even walked down your block, you know the housing market is in deep trouble. Nationally, home values are down over 10% from a year ago. In nearly every neighborhood, there are homes in disrepair, showing signs of abandonment. Risky mortgages and job losses have put people in a position where they can’t afford their mortgage payments. They can’t sell without taking a serious loss, so they often just walk away and destroy their credit in the process. North Denver is faring better with a slight increase in property values, but hope is still a rare commodity in the real estate world.

The President Elect’s website lays out an ambitious agenda designed to help all homeowners, not just those in trouble. In my ongoing series, I’ll examine his policy agendas and his decisions and how they will affect the real estate market, especially in North Denver.

Until Obama takes office, we have little to judge but his promises. However, he has made some very concrete decisions in the form of cabinet nominees. One such nominee, Shaun Donovan, who has been chosen to head up the Department of Housing and Urban Development, has received rave reviews from economists and from the National Association of Realtors.

Donovan is currently the New York City Housing Commissioner. Senator Charles Schumer of New York calls Donovan, “one of the most effective housing commissioners in New York City’s history.” Prior to that position, he was a managing director at Prudential Mortgage Capital, where he was in charge of its portfolio of investments in affordable housing loans. Donovan worked for HUD under the Clinton administration.

Donovan will be part of an economic team lead by Tim Geithner, Obama's nominee for Treasury secretary, and Larry Summers, who will chair Obama's National Economic Council. As head of HUD, Donovan’s main challenge will be to confront the escalating foreclosure crisis. Despite the country’s deficit situation, Donovan will not be without funding. Obama plans on using the second half of the $700 billion bailout money to help homeowners in need. Congress set aside $300 billion to help homeowners trade their current mortgages for more affordable ones, though few have applied.

Donovan has a proven record of curtailing foreclosures and of making homeownership more affordable. His approach is to the left of center, though not anti private sector. In 2006, he was quoted as saying, “I’m in government because of the role of government in setting rules and working in partnership with the private sector. On the other hand, there’s no way you could ever get to a scale that can really affect the housing problems in this country without working with the market.” More HERE
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