Obama jobs program to include 'mortgage relief' ... and why it won't matter

The Washington Post is reporting this morning that President Obama's jobs program will include amongst its many proposals more relief for struggling homeowners.

The president will lay out the particulars of the proposals after Labor Day. Details are lacking at this point on housing, but I'm not getting my hopes up.

After all, everything the Obama administration and the Bush administration before it has done in their attempts to boost housing has failed. The only so-called success, the new homebuyer tax credit, merely created a false bottom and screwed things up even more.

Any proposal for mortgage relief will probably rely on the banks just as past ones did, and we know how well that worked out. The banks are quite happy to keep their bailout money to themselves, and everyone in Washington lacks the political courage to put any pressure on them.

And with everyone running scared from the debt and deficit boogieman, plans that could actually make a difference, like that put forward by former New York governor Eliot Spitzer are never going to happen. Basically, Spitzer lays out the case for Fannie and Freddie addressing the economy by adjusting loan amounts on underwater mortgages they own. He's not the first to propose this type of plan.

At the very minimum, the government should be forcing banks (or the GSEs, at least) to refinance underwater loans at today's incredibly low rates.

The worst thing is that neither Obama, or any of his potential opponents in next year's election, are talking about housing in any significant way. In every previous economic downturn, housing has been the industry to lead us out. Anyone who thinks we can recover this time without a healthy housing market is, quite frankly, an idiot.