Washington (CNN) - Housing and Urban Development Secretary Shaun Donovan revealed to CNN Friday that the Obama administration plans next week to unveil two new initiatives to deal with the crumbling housing market, and he left the door open to also reviving the expired $8,000 tax credit for first-time home buyers that had been propping up the industry.
"We're going to be rolling out an FHA refinancing effort to help borrowers who are under water in their homes get above water," Donovan said in an exclusive interview taped for CNN's "State of the Union with Candy Crowley" on Sunday. "And second, we're launching an emergency homeowners' loan program for unemployed borrowers to be able to stay in their homes."
The swift action being pushed by President Obama's housing chief come in response to awful news in the housing industry this week, starting with Tuesday's revelation that existing home sales hit their lowest level in over a decade, declining by over 27 percent during the month.
Then on Wednesday, new home sales took a beating, falling to its lowest point since 1963, despite the fact that Donovan claimed in May that the housing market "has begun to turn the corner" and then said earlier this month that the market is in "significantly better shape than anyone predicted" last year.
"In July, we all expected home sales numbers to go down as a result of the end of the tax credit, but they were clearly worse than expected," Donovan acknowledged on Friday to CNN Senior White House Correspondent Ed Henry, filling in for Candy Crowley this Sunday.
Donovan was referring to the recent expiration of the tax credit for first-time home buyers, which analysts believe helped spark the sharp decline in home sales in July.
When pressed on whether the White House will now push for an extension of the tax credit, Donovan suggested the credit will not come back in the short-term but he left the door open to bringing it back down the road if the industry does not improve.
"I think it's too early to say, after one month of numbers, whether the tax credit will be revived or not," Donovan told CNN. "All I can tell you is that we are watching very carefully. I talked earlier about new tools that we will launch in the coming week, and we are going to be focused on where the housing market is moving going forward. And we're going to do everything we can to make sure that this market stabilizes and recovers."
The administration leaving the door open to the possibility of extending the popular tax credit is new, though some of the other initiatives mentioned by Donovan have been pushed by the administration previously. Back in March, the Treasury department announced adjustments to Federal Housing Administration programs in order to help struggling homeowners as part of the existing Troubled Asset Relief Program (TARP).
There was $3 billion in emergency loans for the unemployed included in the recently passed Wall Street Regulatory Reform Bill. Though that money has gotten little attention so far and likely will be doled out in coming weeks as Donovan suggested.
Donovan was speaking from New Orleans, where he will be when the President tours part of the city and delivers a speech at Xavier University on Sunday to mark the fifth anniversary of Hurricane Katrina. He said that while a lot of progress has been made in rebuilding the city, there is still a lot of work to be done.
"This is the place - New Orleans and the Gulf Coast - where I think the American people witnessed a real loss of faith in their federal government," Donovan said. "I've been really moved by the spirit of the people in New Orleans and the Gulf, and their rebuilding and the optimism and progress that I've seen. More than 90 percent of the population is back in the New Orleans area, and there is still much ahead of us."
(Updated at 7:05 p.m. ET)
Yeah, Dubya may have driven the economy into a ditch, but you chumps are driving it over the cliff ala Thelma and Louise.
Thanks but no thanks on your housing market help... you're about to "help" us to death.
The truth is, if the media were not so contemptibly timid, they'd actually skewer the "Recovery Summer" with the same ferocity they lampooned "Mission Accomplished." But that would actually require balls, something the pu$$!e$ in the MSM have none of. Edwin R. Murrow truly rolls in his grave.
Good, however the first-time-buyers incentive was great. That should come back.
FYI: Back 15 years ago existing home sales also feel by ....27%, we did rebound. The rule of "supply and demand" applies to Real Estate also. In our neighborhood that are too many houses for sale, which brings down the prices of all the homes. Home owners need to be smart, when there is a glut of homes on the market do us all a favor and unless you have to move for a job, don't put your home up for sell. Wait this downturn out, and you will get more money for your home.
How about some tough love? That's what we need in this country, to right the problems we're facing.
How about, if you can't afford something, you don't buy it. But if you use finanical yoga to get yourself into a property you can't afford, you lose it.
I know, I know... I'm "evil" and "heartless."
On a related note, I don't buy ANYTHING I can't afford, and rarely, rarely use credit. As a result, I'm not at risk of losing ANYTHING. But again, I must be "evil" and "heartless" to insist that people live within their means like I do... why, to insist that families not be automatically entited to a 6,000 sq ft home with granite counters to hold their five laptops and six iPads... what sort of eeeevil hate-filled person am I?
It's about time to take actions to help people buy and/or stay in their homes. I think special "Veterans' home buying programs" should be included too. So many are returning home and are unable to find work.
Let's do a bit more – OK?
obama should leave the housing to people that know what to do. So far he has done nothing but make matters worse.
Someone should explain to these bozoos that this is the real world and not an exercise for a school lab. If he really went to college, by now he should have realized that the real and the make believe in classrooms are not the same.
What will the Republicans say. You guessed it NO, let them lose their homes, stop their unemployment, stop social security, stop healthcare benefits, the H..,.. with their problems. But don't forget Republicans will ask for your vote in November which will put you outdoors and in the soup lines while Palin's daughter Bristol goes dancing in your face.
Here we go again.Another round of unfunded stimulus to prop up housing.When is this administration going to let the freemarkets take care of the problem?Why do they continue to put people in housing that they can't afford by subsidizing their mortgage payments with taxpayer's money?We will never get this economy turned around until we throw this whole bunch out on their hindparts !!!
Put away Monopoly and pull out the Game of Life. We need larger bills.
No to the unemployed and underemployed. That is 25% of the country. The other 75% will vote for us, and when half the 25% get back to work, they'll thank us.
No. No. No. No.
You are thiefs.
August 27th, 2010 5:35 pm ET
...and anyone else here who feels that EVERY person who is in trouble NOW with their homes – BOUGHT SOMETHING THEY COULD NOT AFFORD!!! You are MEAN and EVIL to think that and it's 'typical' of all RepubliCAN'Ts to believe it.
I bought my home and COULD afford it – easily. I've been in my home for over 7 years!!! How about losing an income in my family and a REDUCTION in pay in order to keep my job; is that MY FAULT!!! No, that is what happens to REAL Americans!!!
You RIGHT PEOPLE all think a lot and what's in your best interest is 'tax breaks for the RICH' – Period!!!!! I am SICK of you and others that think like you!!!
I don't know if this is the right thing to do but I do know that something has to be done and all Republicans are suggesting is to continue the Bush Tax Breaks and give out more tax breaks. The people losing their homes do not make the sum of money required to qualiffy for these tax cuts. Again, I admit that I do not know if this is the route to take but I do know it is better then doing nothing.
hope it's plain and simple without the mortage company detemining who qualifies and who don't.
Shock it to CHASE president Obama!
Bring them down.
@ jim – umm... i don't know if you've heard but there's never been a "free market" in the united states. the government forces monopolies to break up, recalls bad products, etc. (all those things you and i think are necessary and great for society/competition). by definition that means the market isn't "free"
Eric – How about you seek professional help, like of a bank, to see IF you CAN afford or not a house and the bank, for pure greedy purposes, says that you can (when you can't) and you believe in the bank?
Or how about you lose your job and not being able ANYMORE to afford the house?
Or... you come up with a better criticism?
Ah, the stupidity of the Obama followers. Didn't the fact that Palin proved much smarter than Obama on predicting the first failed stimulus jobs bill show you anything? Or Palin being right and Obama stupidly wrong on the healthcare bill? Idiots.
The tax credit worked before, why not? It seems the market is not ready to respond on it's own. The buyers still have to actually qualify for the loan. Not like before the fall, when bankers laughed at me for buying what I could afford, instead of the McMansion, with everything anybody would desire. (I do not desire that.) I stuck with my plan and went to another lender.
Sure Annie, everybody deserves their own home! It's a right!!! No job, no worries! Just move right in!
What are you people thinking????
Common Sense! It escapes many!
I feel the biggest problem in housing are the banks in general. When a house if fully paid off and the owner wants to borrow 20k out of a paid off house worth over 140k and get denied, something is wrong.
Whats even worse, one of the reason for denial is the loan amount. The 20k amount is too low of an amount to take out of equity. For real??? Now that is crooked. Telling people they have to borrow more money to get a loan approved.
America severely needs to rethink its housing strategy in general. It is rampant with corruption, lending agents making outrageous commissions and spending it on cocaine, bait and switch gimmicks, and carpet bagger vultures that only care about making a ton of $ instead of investing in their communities.
The bubble truly needed to burst and we need to figure out a long-term solution to reform the market.
Ever notice that a Liberal Democrat's solution to any problem is to throw more money at it?
Here's a concept... REDUCE the size of government, get out of the way of our free enterprise system and focus on ways to LOWER taxes!
Maybe then, People will find new jobs and can afford a house on their own!
For the parasites looking for more entitlements and government handouts, change is coming so you better get ready to go to work and get off the back of the American tax payer!
Is it too late to tell Britain we are sorry about that Revolutionary thing and want a monarchy back so heads can roll, literally?
TARP only help big banks,my bank indymac refuses to enroll me in the homeowners program jerks.my house value lost 40 percent I can't sell it,last year my property taxes doubled, yes doubled to and heating doubled.It sucks I have to pay more taxes bz my city is broke.
Keep government out of housing. they are the ones who caused this mess in the first place. Yes, I'm republican, I bought my house, no government assistance. Of course, with this terrible mess the government has made of the housing market, my house probably isn't worth what I paid for it, but it's mine and I'll hold on to it until we get someone in Washington that has some common sense and can fix the problem, without sticking their hand directly in the housing market. I waited until I could afford to build a house, not too soon. People need to realize that if you work hard and don't over spend or over CHARGE (like our Government) and be patient, you too can have a nice home. When was the last time you saw a government housing project that was well cared for and maintained. People who don't pay for their home or even those who have a lot of government assistance, don't seem to have the pride to take care of their houses. I know it sounds cruel, but it's true in my opinion.
This is just another way to reward the banks who created this ponzi housing scheme. Then defrauded the tax payer of billions.
Then again did not do any useful work in modifying mortgages. Basically fed gives more hens to the fox who ate all the hens the first time. Guess what the result is the same and has been same multiple times and will be no different next time.
I know folks who have worked with Wells Fargo for over a year after being asked to repeated fax the information and basically doing nothing. Just playing a game of keep on calling.
Why is there no lawsuit against the banks who engaged in this ponzi housing scheme.
Someone complained to me the other day they were underwater on their mortgage, and asked "what are we going to do"? How about you put your nose to the grindstone, pay your bills, pay your mortgage month after month, don't spend more than you take it, and you will get to the other side of your mess. Might it take a few years of really, really hard work and sacrifice, and maybe having to start over? Yes, and that's what people have to do – you figure it out and you hold your head high. That's not a democrat or republic piece of advice – it's life.