In Florida, one in nine households with a mortgage was at risk of foreclosure this summer. This week, the Obama administration will begin yet another program aimed at easing the housing crisis. It's the first that goes to the root of the crisis - underwater mortgages - but it may do no more good than the others.
Starting Tuesday, the Federal Housing Administration will permit lenders to give those homeowners refinanced loans backed by the government. Lenders must forgive at least 10 percent of the principal. In Florida, where 46 percent of home mortgages are under water, a 10 percent principal reduction means little. Home values in South Florida suffered the worst decline of 25 large metropolitan areas in the second quarter of this year.
Because prices have fallen so far, it may take a decade for many borrowers to erase their negative equity. Many will walk away from their mortgages, adding to the foreclosures and further delaying Florida's recovery. "The Obama administration's housing programs have not been successful," said Jack McCabe, chief executive of Deerfield Beach-based McCabe Research & Consulting. "In fact, I think they've been flops.
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