Unlike his Home Affordable Refinance Program that failed to garner widespread participation owing to unaccountable complexity, President Barack Obama’s new initiative eliminates homeowner fees associated with refinancing, removes squirrelly income requirements, provides loans at rock-bottom prices and reduces risk for the banks involved.

Significantly, the new program makes it more profitable for banks to modify a mortgage than to foreclose on a home — an incentive that by itself might ensure success.

Obama’s initiative requires nothing from a deadlocked Congress, and it can only be called a positive step forward: Up to 1 million Americans could benefit, keeping people in their homes and sparing them the pain and uncertainty of carrying overwhelming debt.

But it is not enough. HARP, launched in 2009, was to have benefited 5 million borrowers but reached fewer than 1 million, only a fraction of them seriously “underwater.”

Indeed, of the $30 billion approved by Congress for it, only $4 billion was tapped. There is just too much catching up to do before mortgage reform as constituted now could exert positive effects in an economy that depends upon secure consumers willing to spend.

If the administration is to take a lesson away from its handling so far of the economic crisis, and with it a collapsed housing market, it is that doing too little too late exerts harm of its own.

— The Oregonian, Portland, Oct. 24

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