Has Obama's housing policy failed?

NEW YORK (CNNMoney) -- The president's efforts to revive the housing market have largely failed. But is that entirely Obama's fault?

"I don't think anyone could have done anything to stabilize the housing market," said Ed Jacob, executive director of NHS Chicago, which provides homeownership and foreclosure prevention services. "This housing market was in far worse shape than anyone knew."

Obama took office in 2009, promising swift action to address the mortgage crisis. He quickly unveiled his signature foreclosure prevention program, known as HAMP, and his refinance program, known as HARP.

But the HAMP program, which was designed to lower troubled borrowers' mortgage rates to no more than 31% of their monthly income, ran into problems almost immediately. Many lenders lost documents, and many borrowers didn't qualify. Three years later, it has helped a scant 910,000 homeowners -- a far cry from the promised 4 million.

HARP, which was intended to reach 5 million borrowers, has yielded about the same results. Through October, when it was revamped and expanded, the program had assisted 962,000.

Meanwhile, more than 3.5 million people remain behind in their mortgage payments and more than 1.9 million homes are in foreclosure. And home prices have fallen for six months straight.

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One of the main problems with Obama's foreclosure prevention program was that the housing crisis had already spiraled beyond unaffordable mortgage rates. Homeowners were defaulting because they didn't have jobs -- and the administration's effort did little to help them.

In response, Obama rolled out a multitude of initiatives designed to help the underwater and the unemployed. But few of them have had much impact.

"He focused his gun in the wrong place," said Anthony Sanders, a real estate finance professor at George Mason University. "The administration's approach is to kick the can down the road. That d! oesn't l ead to a recovery and just strings the problem along."

But the president deserves points for having the Federal Housing Administration step in to provide mortgages for homeowners and for spurring homebuying with a tax credit, said John Burns, head of John Burns Real Estate Consulting. They staunched the bleeding in home sales and values. The Federal Reserve has also tried to help by keeping mortgage rates at record lows.

At the same time, though, the economy has remained weak. Unemployment is still high, consumer confidence is still low and banks are still hesitant to lend.

And Congress and the president remain at odds over how to spur job creation, which many say is the key to stabilizing the housing market.

"Obama was in many ways hemmed in as to how to effectively and positively affect the housing crisis," said Gabriel Stuart, director of UCLA's Ziman Center for Real Estate. "The economy was moving under their feet."

Missed opportunities

One thing some experts say Obama could have done is required servicers, as well as Fannie Mae and Freddie Mac, to write down the principal balance on loans. This, however, has been a very controversial step because it would have forced large losses on banks and the government-controlled mortgage finance companies.

But at least the administration could have come down harder on the mortgage servicers, forcing them to expand and improve their foreclosure prevention processing procedures more quickly, experts said.

In Phoenix, Obama's foreclosure programs are helping some people, but many more could take advantage of them if the administration had taken a harder line with servicers, said Patricia Garcia Duarte, chief executive of NHS-Phoenix, which counseled 1,800 delinquent homeowners last year.

"The missing ingredient was that it was a voluntary program," she said. "If it hadn't been, we would have had much better results."

Were you f! alling o ut of the middle class even before the Great Recession hit? Do you have a job but still feel you aren't upwardly mobile? Are you better or worse off than your parents? Email realstories@cnnmoney.com with your name and phone number, and you could be featured in an upcoming story on CNNMoney. 

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